ARTICLE/PROBLEM: Your uncle is planning to sell his house in Laoag City. He advertised the selling of the property in his social media account and was able to receive three compelling offers. OFFER A: PhP 1 200 000.00 down payment plus a P30 000 quarterly payment that earns 12% interest compounded monthly payable for 5 years. OFFER B: PhP 950 000.00 down payment plus a P15 000 monthly payment that earns 12% interest compounded monthly payable for 5 years. OFFER C: PhP 1 500 000.00 down payment and P10 000 monthly for 4 years. The first monthly payment is 1 year after the down payment has been made. interest rate is 12% converted monthly. LEARNING COMPETENCIES (Understand) illustrates simple and general annuities. distinguishes between simple and general annuities. finds the future value and present value of both simple annuities and general annuities. calculates the fair market value of a cash flow stream that includes an annuity. calculates the present value and period of deferral of a deferred annuity. INSTRUCTIONS: Read the given article. Then answer the following: QUESTION: If you were to advise your uncle, which of the three options are you going to recommend? What offer will give your uncle the best fair market value?
ARTICLE/PROBLEM: Your uncle is planning to sell his house in Laoag City. He advertised the selling of the property in his social media account and was able to receive three compelling offers. OFFER A: PhP 1 200 000.00 down payment plus a P30 000 quarterly payment that earns 12% interest compounded monthly payable for 5 years. OFFER B: PhP 950 000.00 down payment plus a P15 000 monthly payment that earns 12% interest compounded monthly payable for 5 years. OFFER C: PhP 1 500 000.00 down payment and P10 000 monthly for 4 years. The first monthly payment is 1 year after the down payment has been made. interest rate is 12% converted monthly. LEARNING COMPETENCIES (Understand) illustrates simple and general annuities. distinguishes between simple and general annuities. finds the future value and present value of both simple annuities and general annuities. calculates the fair market value of a cash flow stream that includes an annuity. calculates the present value and period of deferral of a deferred annuity. INSTRUCTIONS: Read the given article. Then answer the following: QUESTION: If you were to advise your uncle, which of the three options are you going to recommend? What offer will give your uncle the best fair market value?
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:ARTICLE/PROBLEM: Your uncle is planning to sell his house in Laoag City. He advertised
the selling of the property in his social media account and was able to receive three
compelling offers.
OFFER A: PHP1 200 000.00 down payment plus a P30 000 quarterly payment that
earns 12% interest compounded monthly payable for 5 years.
OFFER B: PhP 950 000.00 down payment plus a P15 000 monthly payment that
earns 12% interest compounded monthly payable for 5 years.
OFFER C: PhP 1 500 000.00 down payment and P10 000 monthly for 4 years. The
first monthly payment is 1 year after the down payment has been made.
interest rate is 12% converted monthly.
LEARNING COMPETENCIES (Understand)
illustrates simple and general annuities.
distinguishes between simple and general annuities.
finds the future value and present value of both simple annuities and general
annuities.
calculates the fair market value of a cash flow stream that includes an annuity.
calculates the present value and period of deferral of a deferred annuity.
INSTRUCTIONS: Read the given article. Then answer the following:
QUESTION: If you were to advise your uncle, which of the three options are you going to
recommend? What offer will give your uncle the best fair market value?
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