1. A woman arranges to repay a P10,000 bank loan in 10 equal payments at a 10% effective annual interest rate. Immediately after her third payment she borrows another P5000, also at 10%. When she borrows the P5,000, she talks the banker into letting her repay the remaining debt of the first loan and the entire amount of the second loan in 12 equal annual payments. The first of these 12 payments would be made 1 year after she receives the P5,000. Compute the amount of each of the 12 раyments.

1. A woman arranges to repay a P10,000 bank loan in 10 equal payments at a 10% effective annual interest rate. Immediately after her third payment she borrows another P5000, also at 10%. When she borrows the P5,000, she talks the banker into letting her repay the remaining debt of the first loan and the entire amount of the second loan in 12 equal annual payments. The first of these 12 payments would be made 1 year after she receives the P5,000. Compute the amount of each of the 12 раyments.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

1. A woman arranges to repay a P10,000 bank
loan in 10 equal payments at a 10% effective
annual interest rate. Immediately after her
third payment she borrows another P5000,
also at 10%. When she borrows the P5,000,
she talks the banker into letting her repay the
remaining debt of the first loan and the entire
amount of the second loan in 12 equal annual
payments. The first of these 12 payments
would be made 1 year after she receives the
P5,000. Compute the amount of each of the
12 payments.

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