ose owned Pedro the sum of P 5,000 due on Dec. 31, 1975 and P 6,000 due on Dec. 31, 1998. However Jose was unable to pay as agreed and was allowed to make a payment of P 8,000 on Dec. 31,2000 and a final payment of P 5,380 on Dec. 31, 2001. Determine the annual rate of interest on this payment?

ose owned Pedro the sum of P 5,000 due on Dec. 31, 1975 and P 6,000 due on Dec. 31, 1998. However Jose was unable to pay as agreed and was allowed to make a payment of P 8,000 on Dec. 31,2000 and a final payment of P 5,380 on Dec. 31, 2001. Determine the annual rate of interest on this 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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Question

Jose owned Pedro the sum of P 5,000 due on Dec. 31, 1975 and P 6,000 due on Dec.
31, 1998. However Jose was unable to pay as agreed and was allowed to make a
payment of P 8,000 on Dec. 31,2000 and a final payment of P 5,380 on Dec. 31, 2001.
Determine the annual rate of interest on this payment?

Pls show written solution with cashflow diagram

3. Jose owned Pedro the sum of P 5,000 due on Dec. 31, 1975 and P 6,000 due on Dec.
31, 1998. However Jose was unable to pay as agreed and was allowed to make a
payment of P 8,000 on Dec. 31,2000 and a final payment of P 5,380 on Dec. 31, 2001.
Determine the annual rate of interest on this payment?

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