John bought a car worth Php 1,000,000 if paid in cash. If paid on installment basis, he will pay Php 250,000 downpayment, Php 300,000 at the end of one year; Php 400,000 at the end of three years and a final payment at the end of five years. Interest rate is 20% compounded annually. a. Construct the cash flow diagram if paid on installment basis b. What will be the amount of the final payment?
John bought a car worth Php 1,000,000 if paid in cash. If paid on installment basis, he will pay Php 250,000 downpayment, Php 300,000 at the end of one year; Php 400,000 at the end of three years and a final payment at the end of five years. Interest rate is 20% compounded annually. a. Construct the cash flow diagram if paid on installment basis b. What will be the amount of the final 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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John bought a car worth Php 1,000,000 if paid in cash. If paid on installment basis, he will pay Php 250,000 downpayment, Php 300,000 at the end of one year; Php 400,000 at the end of three years and a final payment at the end of five years. Interest rate is 20% compounded annually.
a. Construct the cash flow diagram if paid on installment basis
b. What will be the amount of the final payment?
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