A merchant acquires a lot of merchandise with a value of $ 350,000 that he agrees to liquidate by making an immediate payment of 123,500 and a final payment 5 months later, agreeing to pay interest at a rate of 23% semi-annually. How much should this payment be?
A merchant acquires a lot of merchandise with a value of $ 350,000 that he agrees to liquidate by making an immediate payment of 123,500 and a final payment 5 months later, agreeing to pay interest at a rate of 23% semi-annually. How much should this payment be?
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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RESOLVE THIS PROBLEM IN DIGITAL FORMAT (NOT HANDWRITTEN)
Solve the following problem step by step, include the formulas you use and the development please
A merchant acquires a lot of merchandise with a value of $ 350,000 that he agrees to liquidate by making an immediate payment of 123,500 and a final payment 5 months later, agreeing to pay interest at a rate of 23% semi-annually. How much should this payment be?
Expert Solution
Step 1
The present value is the value of the sum received at time 0. It is the current value of the sum that will be received in the future period.
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