Mr. Fajardo borrowed P10,000.00 and was able to sign a promissory note that he would pay P20,327.90 after 4 years. How much is the nominal rate of interest and the corresponding effective rate if money is compounded bi-monthly?

Mr. Fajardo borrowed P10,000.00 and was able to sign a promissory note that he would pay P20,327.90 after 4 years. How much is the nominal rate of interest and the corresponding effective rate if money is compounded bi-monthly?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: K Find the interest rate needed for the sinking fund to reach the required amount. Assume that the…

A: The objective of the question is to find the interest rate required for a sinking fund to reach a…

Q: a. If an investor invests a sum of Rs. 6000 at an interest rate of 10% compounded quarterly. After 3…

A: a. Given An investor invests a sum of Rs. 6000 at an interest rate of 10% compounded quarterly.…

Q: Alex wishes to have P 800,000.00 available to buy a car in 4 years. How much should he deposit in a…

A: Given that, Present value (P) = 800,000 Rate of interest (r) = 10 or 0.10 Compounded quarterly = 4…

Q: Don Magellan borrowed today from Ginoong Lapulapu P300,000.00 and agreed to repay the loan with 4…

A: Given that, P = 300,000.00 Interest Rate = 12% Time Period = 4 Months When the rate is calculated…

Q: An investment allows for end-of-year payments that grow by 2% per payment for 15 years, starting at…

A: A=$1100g=2%i=3.4%N=15 years

Q: 18 YEAR ANNUITY WITH 7.86% COMPOUNDED HOW MUCH TO PAY TO RECEIVE $1900 ANNUALY OVER 18 YEAR PERIOD

A: Compounding refers to a process in which the interest rate is charged on the investment as well as…

Q: 1. Find the amount (future value) of the ordinary annuity. (Round your answer to the nearest cent.)…

A: Future value (FV) is the value of a current asset at a future date based on an assumed rate of…

Q: SITUATION1: Five hundred pesos (P500.00) is deposited monthly to an account earning 7% compounded…

A: This is calculated using the following formula:FV = P * (1 + r/n)n*twhere:FV is the future valueP is…

Q: You have borrowed $300K to purchase a house. The term of the mortgage is 15-year fixed with a…

A: here we calculate monthly payment and increase in pay off mortgage in 10 year by using the formula…

Q: Mr. Lee purchased a small condominium. He paid P350,000 as down payment and agreed to pay P35,000…

A: In the first place, the loan amount is the present value of quarterly payments for 5 years…

Q: Lany borrows money from a bank and promised to pay P5000.00 after 12 months. How much money did he…

A: Part-1) Given that: Future value (FV) = P5000 Time (n) = 1 year (or 12 months) Interest rate (i) =…

Q: If a bank says that it has a 5% nominal interest rate, but money is compounded monthly in that bank,…

A: An effective annual interest rate is basically the actual return on a savings account or on any…

Q: WHAT IS THE PRINCIPAL AMOUNT OF P300,000.00 FUTURE PAYMENT TO BE MADE IN 5 YEARS AT 8% INTEREST…

A: Present value refers to the discounted value of a future cash flow . When we compute time value of…

Q: Please show work

A: According to the question, an investment of $2,000 has made for 20 years at 8% per year. The amount…

Q: A man will deposit Php 2,000 with a savings and loan association at the beginning of each 3 months…

A: Every three month deposits, A = 2000 Time = 9 years Number of compounding = 9 years x 4 = 36…

Q: Tito Ricky borrowed P 500,000 at an interest rate of 12% compounded monthly. Monthly payments of P…

A: In economics, present value refers to the current value of a future stream of cash flow. Future…

Q: company must pay a $308, 000 settlement in 3 years. What amount must be deposited now at 8%…

A: Here, we calculate the given as follow;

Q: 4) An engineer takes a loan of 50,000 is to be paid over 10 years with equal monthly payment. The…

A: Nominal interest rate is the interest rate before taking inflation into account, in contrast to real…

Q: An engineer deposits 7,000 pesos every year end in a savings account that pays nominal annual…

A: The formula: FV=A[eδn-1eδ-1] Where,FV = Future Value A = Regular savings n = Number of periodδ =…

Q: Compute for the effective interest rate per month Nominal rate = 22.86% compounded semi-annual

A: Effective Interest Rate = (1+ i/n )n -1 Where , i = interest rate n = Compounding periods Given ,…

Q: John-The-Smart-Investor plans to make uniform deposits every three months into a high yield savings…

A: YTM = 8% = 0.08 Coupon rate = 10% = 0.10 time to maturity of bond, n = 3 years coupon value, C =…

Q: Supposed you borrowed some money from a friend two hundred and seventy-five days ago at a simple…

A: n = 275 Interest = 12% Amount = 25,000 Assuming total days in years = 365

Q: If P10,000 is deposited each year for 9 years, how much annuity can a person get semi-annually from…

A: In this question:- P10,000 is deposited each year time=9 years Cost of money is 14% compounded…

Q: after 5 years if the account earns 8.0% interest compounded annually? Be sure to include a cash flow…

A: Cash Flow (CF) is the increase or decrease in the amount of money a business, institution, or…

Q: Mrs. Go make deposits that forms a geometric gradient that increases at 6% per month for 1 year. She…

A: We have given that the cash flow is geometric gradient series cash flow where g =6% of g=0.06 First…

Q: Mr Chen wants to get a lumpsum of 3.5 million pesos when he retires at the end of 20 years. How much…

A: In the question above, it is given that : Amount = 3,500,000 Pesos Time period = 20 years Interest…

Q: What is the present value of a perpetuity of 15, 000p payable every end of 3 months if money is…

A: Perpetuity Amount = 15000 Payable at the end of every month Interest rate (i) = 8% compounding…

Q: At a certain interest rate compounded quarterly, 2500 will amount to 10500 in 7 years. What is the…

A: The formula to calculate the amount is given by: A = P1+r/41004nwe divide the rate of interest by 4…

Q: A man wishes to bequeath to his daughter P500k twenty yrs from now. What amount should he invest now…

A: SOLUTION AMOUNT-500K (500000) Rate - 18% For first 5 yr rate- 16 % next 15 yr principle -?we need…

Q: Vince loaned P30,000.00 from a cooperative and promised to pay it back with x times his original…

A: Solving completely

Q: Vince loaned a certain amount from a cooperative and promised to pay it back with 2.33 times his…

A: Loan Amount = A Maturity Amount = 2.33A r = 10.42%

Q: Elmo borrowed $30,000 from the Statler & Waldorf Bank at 12% APR, compounded monthly. The loam is to…

A: here we calculate monthly loan payment amount by following method as follow;

Q: How much money would you need to deposit today at 8% annual interest compounded monthly to have…

Q: You want to borrow $1500 at 8% and you are willing to pay $210 in simple interest.How long can you…

A: Present value is the value of investment in today's dollar. Future value is the value of investment…

Q: A series of equal semi-annual payments of $2900 for 3 years is equivalent to what present amount at…

A: Compound interest is computed on both the initial amount of money and the interest that has been…

Q: At certain interest rate compounded quarterly, an amount worth P8000 will be P20000 after 5 yrs. How…

A: Given Present value P=8000 Value after 5 years =20,000 Compounded period = quarterly. First we will…

Q: What interest rate is applied if P34000 becomes P87200 in 300 days?

A: Given, Amount + Principal = A+P= 87200 P = 34000 Interest = A-P = 53200 Time = t = 300 days or…

Q: A man bought an equipment costing P125,000 payable in 12 quarterly payments. Each installment is…

A: Given: Cost of equipment=P125000 Number of quarterly payment=12 Rate of interest=14% To find: Amount…

Q: Jay wishes his son,Jayson to receive 1000000 twenty years from now. What amount should he invest…

A: Future value = 1000000 Interest rate compounded annually = 12% Interest rate compounded monthly =10%

Q: You want to invest an amount today that will last for 5 years and allow you to withdraw $555 at the…

A: Given: Time = 5 years Number of compounding periods, n = 5 x 2 = 10 Annuity = $555 Interest rate =…

Q: A man wishes his son to receive P250,000 ten years from now. What amount should he invest if it will…

A: The present worth technique is very famous in industry since every single future expense and incomes…

Q: Suppose that $12,000 is placed in a bankaccount at the end of each quarter over the next 15years.…

A: A. Future value when compounded quarterly=A1+rn-1rInterest rate,…

Q: John borrows $10,000 at 18% compounded annually. He pays off the loan over a 5-year period with…

A: A loan helps an individual to borrow and spend on his/her current needs. However, an interest rate…

Question

Mr. Fajardo borrowed P10,000.00 and was able to sign a promissory
note that he would pay P20,327.90 after 4 years. How much is the
nominal rate of interest and the corresponding effective rate if money
is compounded bi-monthly?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Nadia needs to have 59,039 dollars to buy a new car 9 years from now. How much does she need to save at the end of each month if her savings account pays 7.35% per year, compounded quarterly?
What is the future worth of a series of equal year end deposits of $2.800 for 13 years in a savings account that eams 10% annual interest if the following were true? (a) All deposits are made at the end of each year? (b) All deposits are made at the beginning of each year? O Click the icon to view the interest factors for discrete compounding when i 10% per year. (a) The future worth of a series of equal year-end deposits made at the end of each year is $ (Round to the nearest dollar) (b) The future worth of a series of equal year-end deposits made at the beginning of each year is $ (Round to the nearest dollar)
Brandon purchased an annuity that had an interest rate of 2.75% compounded semi-annually. It provided him with payments of $3,500 at the end of every month for 6 years. If the first withdrawal is to be made in 4 years and 1 month, how much did he pay for it? Round to the nearest cent $0.00
Mary makes year-end deposit of $4500, the first year increasing the year’s deposits by 8% until the end of the 10th year. Ellen makes equal start-of-year deposits of $6000 each year for 10 years. If interest on both funds is 12% compounded annually, how much is difference of savings at the end of ten years? Mr. Reyes borrows P600,000 at 15% compounded annually, agreeing to repay the loan in 25 equal annual payments. How much of the original principal is still unpaid after he has made the 12th payment? please show complete solutions
Due and perpetuity If money is worth 5% compounded quarterly, compute the present value of the perpetuity of P 2500.00 payable quarterly.
A couple borrowed from a lending company an amount of P 4,000 for 6 years at 12%. At the end of 6 years, it renew the loan for the amount due plus P 4,000 more for 3 years at 12%. If the interest rate is compounded annually, what is the future worth of all the money borrowed at the end of the 9 - year period?
Find the amount accumulated FV in the given annuity account. HINT [See Quick Example 1 and Example 1.] (Assume end-of-period deposits and compounding at the same intervals as deposits. Round your answer to the nearest cent.) $110 deposited monthly for 20 years at 3% per year in an account containing $12,000 at the start $ Need Help? Master It Read It
Ramoncito deposited P15,000.00 today and he deposited the same equal amount each month for the next 9 months. Interest is 7% compounded monthly. a. How much is the value of these 10 equal deposits after 9 months from today? b. If Ramoncito failed to pay the last two monthly payments (8th and 9th), how much should he pay the bank a single amount of 14th month? show formula used and systematic solution
A man borrowed P 100,000 and promised to pay after 6 months at an interest of 8% compoundedmonthly per month. How much will the man pay?
Jana invested a hundred thousand pesos in an account now. After eight years, she withdraws the principal. The remaining amount is then left for another eight years. If the interest is 5% semi-annually, what will be the withdrawable amount at the end of the sixteenth year?
Find the amount accumulated FV in the given annuity account. HINT [See Quick Example 1 and Example 1.] (Assume end-of-period deposits and compounding at the same intervals as deposits. Round your answer to the nearest cent.) $150 is deposited monthly for 11 years at 2% per year FV = $ Need Help? Read It Submit Answer
How long (in years) will it take to quadruple it earns 0.08 compounded semiannually??