WITH COMPLETE SOLUTION 1. Diego wants to loan P90,000 to the bank to buy a motorcycle. The following options where he can loan are: Bank A offers a 6.5% interest compounding quarterly Bank B offers a 6.5% interest compounding semi-annually. Bank C offers a 6.5% interest compounding annually. Compare the three different banks by finding their total interest and the maturity amount after 6 years. Which of the three banks should Diego loan? 2. You are planning to franchise a fast-food restaurant. After searching online for relevant details, you found out that the amount in franchising your chosen business is P500,200. Your first option is to avail the loan from a financing firm that charges 5% compounded semi- annually for 3 years. Another option is from a person that charges 6% simple interest for 2 years. Which is a better option for you? Show your solutions to justify your answer.
WITH COMPLETE SOLUTION 1. Diego wants to loan P90,000 to the bank to buy a motorcycle. The following options where he can loan are: Bank A offers a 6.5% interest compounding quarterly Bank B offers a 6.5% interest compounding semi-annually. Bank C offers a 6.5% interest compounding annually. Compare the three different banks by finding their total interest and the maturity amount after 6 years. Which of the three banks should Diego loan? 2. You are planning to franchise a fast-food restaurant. After searching online for relevant details, you found out that the amount in franchising your chosen business is P500,200. Your first option is to avail the loan from a financing firm that charges 5% compounded semi- annually for 3 years. Another option is from a person that charges 6% simple interest for 2 years. Which is a better option for you? Show your solutions to justify your answer.
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
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Transcribed Image Text:WITH COMPLETE SOLUTION
1. Diego wants to loan P90,000 to the bank to buy a motorcycle.
The following options where he can loan are:
Bank A offers a 6.5% interest compounding quarterly
Bank B offers a 6.5% interest compounding semi-annually.
Bank C offers a 6.5% interest compounding annually.
Compare the three different banks by finding their total interest and the maturity amount after
6 years. Which of the three banks should Diego loan?
2. You are planning to franchise a fast-food restaurant. After searching online for relevant
details, you found out that the amount in franchising your chosen business is P500,200. Your
first option is to avail the loan from a financing firm that charges 5% compounded semi-
annually for 3 years. Another option is from a person that charges 6% simple interest for 2
years. Which is a better option for you? Show your solutions to justify your answer.
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