(2-18) a man purchased a house for P425,000. In the first month that he owned the house, he spent P75,000 on repairs and remodeling. Immediately after the house was remodeled, he was offered P545,000 to sell the house. After some consideration, he decided to keep the house and have it rented for P4,500 per month starting two months after the purchase. He collected rent for 15 months and then sold the house for P600,000. If the interest rate was 1.5% per month, how much extra money did he make or lose by selling the house immediately after it was remodeled? (see video for solution)
(2-18) a man purchased a house for P425,000. In the first month that he owned the house, he spent P75,000 on repairs and remodeling. Immediately after the house was remodeled, he was offered P545,000 to sell the house. After some consideration, he decided to keep the house and have it rented for P4,500 per month starting two months after the purchase. He collected rent for 15 months and then sold the house for P600,000. If the interest rate was 1.5% per month, how much extra money did he make or lose by selling the house immediately after it was remodeled? (see video for solution)
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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Topic: ordinary
Transcribed Image Text:(2-18) a man purchased a house for P425,000. In the first month that he owned the house, he spent
P75,000 on repairs and remodeling. Immediately after the house was remodeled, he was offered
P545,000 to sell the house. After some consideration, he decided to keep the house and have it
rented for P4,500 per month starting two months after the purchase. He collected rent for 15 months
and then sold the house for P600,000. If the interest rate was 1.5% per month, how much extra
money did he make or lose by selling the house immediately after it was remodeled? (see video for
solution)
(2-19) Today, you invest P100,000 into a fund that pays 25% interest compounded annually. Three
years later, you borrow P50,000 from a bank at 20% annual interest and invest the fund. Two years
later, you withdraw enough money from the fund to repay the bank loan and all interest due on it.
Three years from this withdrawal, you start taking P20,000 per year out of the fund. After five
withdrawals, you withdraw the balance in the fund. How much was withdrawn? (see video for
solution)
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