A house and lot can be acquired for a down payment of P500 000.00 and a yearlypayment of P100 000.00 at the end of each year for a period of 10 years, starting atthe end of five years from the date of purchase. If money is worth 14%compounded annually, what is the cash price of the property?

Down payment = P 500000 Annual payment = P 100000 Number of annual payments = 10 Discount rate = 14%

Answered: A house and lot can be acquired for a…

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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A house and lot can be acquired for a down payment of P500 000.00 and a yearly payment of P100 000.00 at the end of each year for a period of 10 years, starting at the end of five years from the date of purchase. If money is worth 14% compounded annually, what is the cash price of the property?