A P485,000 loan was originally made at a rate of 3% compounded semi- annually for 1 year. At the end of this period, the loan was extended for 2 years and 8 months, with a new interest rate of 4% compounded continuously, using simple interest for anything less than a year period. a. Find the final amount. b. Create the cash flow with the type of interest being labelled. c. Briefly explain the cash flow diagram.
A P485,000 loan was originally made at a rate of 3% compounded semi- annually for 1 year. At the end of this period, the loan was extended for 2 years and 8 months, with a new interest rate of 4% compounded continuously, using simple interest for anything less than a year period. a. Find the final amount. b. Create the cash flow with the type of interest being labelled. c. Briefly explain the cash flow diagram.
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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Transcribed Image Text:A P485,000 loan was originally made at a rate of 3% compounded semi-
annually for 1 year. At the end of this period, the loan was extended for 2
years and 8 months, with a new interest rate of 4% compounded
continuously, using simple interest for anything less than a year period.
a. Find the final amount.
b. Create the cash flow with the type of interest being labelled.
c. Briefly explain the cash flow diagram.
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