A owes B the following amounts: P 4,000 due 3 years hence P 5,600 due 4 years hence P 3,800 due 5 years hence the agreed rate of interest is 12% compounded monthly. A has just won a major prize inalottery and decides to liquidate these debts now. How much should B be willing to accept in full payment?
A owes B the following amounts: P 4,000 due 3 years hence P 5,600 due 4 years hence P 3,800 due 5 years hence the agreed rate of interest is 12% compounded monthly. A has just won a major prize inalottery and decides to liquidate these debts now. How much should B be willing to accept in full payment?
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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Transcribed Image Text:A owes B the following amounts: P 4,000 due 3 years hence P 5,600 due 4
years hence P 3,800 due 5 years hence the agreed rate of interest is 12%
compounded monthly. A has just won a major prize in alottery and decides
to liquidate these debts now. How much should B be willing to accept in
full payment?
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