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A merchant loaned P20,000.00 to a friend to start a business, the loan was originally made at 8% simple interest for 4 years. However, due to the pandemic the business operation is not stable, thus, the merchant was not able to pay the debt including its interest. The lender decided to extend the loan period for 6 years but, the merchant must pay equal payments at a new interest rate of 10% compounded semi-annually. How much is the equal payment at the end of 10 years?

A merchant loaned P20,000.00 to a friend to start a business, the loan was originally made at 8% simple interest for 4 years. However, due to the pandemic the business operation is not stable, thus, the merchant was not able to pay the debt including its interest. The lender decided to extend the loan period for 6 years but, the merchant must pay equal payments at a new interest rate of 10% compounded semi-annually. How much is the equal payment at the end of 10 years?

Essentials Of Investments
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
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Show your complete solution and show what is given. Your final answer should be in 4 decimal places.
2. A merchant loaned P20,000.00 to a friend to start a business, the loan was originally made at 8% simple interest for 4 years. However, due to the pandemic the business operation is not stable, thus, the merchant was not able to pay the debt including its interest. The lender decided to extend the loan period for 6 years but, the merchant must pay equal payments at a new interest rate of 10% compounded semi-annually. How much is the equal payment at the end of 10 years?
Transcribed Image Text:2. A merchant loaned P20,000.00 to a friend to start a business, the loan was originally made at 8% simple interest for 4 years. However, due to the pandemic the business operation is not stable, thus, the merchant was not able to pay the debt including its interest. The lender decided to extend the loan period for 6 years but, the merchant must pay equal payments at a new interest rate of 10% compounded semi-annually. How much is the equal payment at the end of 10 years?
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