Homework Help is Here – Start Your Trial Now!
Business
Finance
3. The Philippine Society of Mechanical Engineers is planning to construct its own building. Two proposals are being considered: a. The construction of the building now to cost P400,000. b. The construction of a smaller building now to cost P300,000 and at the end of 5 years, an extension to be added to cost P200,000. Which proposal is more economical if interest is 20 %, depreciation is disregarded and by how much? 4. Juan de la Cruz borrowed P2,400 at 1% per month payable in 24 equal end-of-the-month payments. How much of the loan remains unpaid immediately after he has paid the 12th payment?

3. The Philippine Society of Mechanical Engineers is planning to construct its own building. Two proposals are being considered: a. The construction of the building now to cost P400,000. b. The construction of a smaller building now to cost P300,000 and at the end of 5 years, an extension to be added to cost P200,000. Which proposal is more economical if interest is 20 %, depreciation is disregarded and by how much? 4. Juan de la Cruz borrowed P2,400 at 1% per month payable in 24 equal end-of-the-month payments. How much of the loan remains unpaid immediately after he has paid the 12th payment?

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
See similar textbooks
icon
Related questions
Question
3 & 4
1. A man borrows money from a bank which uses a simple discount rate of 14%. He signs a promissory note promising to pay P500 per month at the end of 4th, 6th , and 7th months, respectively. Determine the amount he received from the bank. 2. Mr. W borrowed P2,000 from Mr. Y on June 1, 1928 and P500 on June 1, 1930. Mr. W paid P500 on June 1, 1931, P400 on June 1, 1932, and P700 on June 1, 1933. If money is worth 5% compounded annually, what additional payment should Mr. W pay on June 1, 1936 to discharge all remaining liability? 3. The Philippine Society of Mechanical Engineers is planning to construct its own building. Two proposals are being considered: a. The construction of the building now to cost P400,000. b. The construction of a smaller building now to cost P300,000 and at the end of 5 years, an extension to be added to cost P200,000. Which proposal is more economical if interest is 20%, depreciation is disregarded and by how much? 4. Juan de la Cruz borrowed P2,400 at 1% per month payable in 24 equal end-of-the-month payments. How much of the loan remains unpaid immediately after he has paid the 12th payment? 5. Two years ago, the rental for the use of equipment and facilities was paid 5 years in advance, with the option to renew the rent for another 5 years by payment of P15,000 annually at the start of each year for the rental period. Now, the lessor asks the lessee, if it could be possible to prepay the rental that will be paid annually in the renewed 5- year period. If the lessee agrees, what would be the fair payment to be made to the lessor. USE:i = 8%
Transcribed Image Text:1. A man borrows money from a bank which uses a simple discount rate of 14%. He signs a promissory note promising to pay P500 per month at the end of 4th, 6th , and 7th months, respectively. Determine the amount he received from the bank. 2. Mr. W borrowed P2,000 from Mr. Y on June 1, 1928 and P500 on June 1, 1930. Mr. W paid P500 on June 1, 1931, P400 on June 1, 1932, and P700 on June 1, 1933. If money is worth 5% compounded annually, what additional payment should Mr. W pay on June 1, 1936 to discharge all remaining liability? 3. The Philippine Society of Mechanical Engineers is planning to construct its own building. Two proposals are being considered: a. The construction of the building now to cost P400,000. b. The construction of a smaller building now to cost P300,000 and at the end of 5 years, an extension to be added to cost P200,000. Which proposal is more economical if interest is 20%, depreciation is disregarded and by how much? 4. Juan de la Cruz borrowed P2,400 at 1% per month payable in 24 equal end-of-the-month payments. How much of the loan remains unpaid immediately after he has paid the 12th payment? 5. Two years ago, the rental for the use of equipment and facilities was paid 5 years in advance, with the option to renew the rent for another 5 years by payment of P15,000 annually at the start of each year for the rental period. Now, the lessor asks the lessee, if it could be possible to prepay the rental that will be paid annually in the renewed 5- year period. If the lessee agrees, what would be the fair payment to be made to the lessor. USE:i = 8%
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Market Efficiency
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
Essentials Of Investments
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
FUNDAMENTALS OF CORPORATE FINANCE
FUNDAMENTALS OF CORPORATE FINANCE
Finance
ISBN:
9781260013962
Author:
BREALEY
Publisher:
RENT MCG
Financial Management: Theory & Practice
Financial Management: Theory & Practice
Finance
ISBN:
9781337909730
Author:
Brigham
Publisher:
Cengage
Foundations Of Finance
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS