Peter bought a lot worth P2,000,000 if paid in cash. Based on installment, he paid a down payment of P300,000 starting in this year; P600,000 at the end of one year, unknown payment at the end of three years and the final payment at the end of sixth year. The difference of the present worth of the unknown payment from the present worth of final payment yields to 20% of the price of the lot. The interest of this whole payment is 16% compounded annually. Draw the cash flow diagram. a. What was the unknown payment at the end of three years? b. What was the final payment at the end of sixth year? c. What would be the annual deposit if the interest is compounded semi-annually?
Peter bought a lot worth P2,000,000 if paid in cash. Based on installment, he paid a down payment of P300,000 starting in this year; P600,000 at the end of one year, unknown payment at the end of three years and the final payment at the end of sixth year. The difference of the present worth of the unknown payment from the present worth of final payment yields to 20% of the price of the lot. The interest of this whole payment is 16% compounded annually. Draw the cash flow diagram. a. What was the unknown payment at the end of three years? b. What was the final payment at the end of sixth year? c. What would be the annual deposit if the interest is compounded semi-annually?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:1. Peter bought a lot worth P2,000,000 if paid in cash. Based on
installment, he paid a down payment of P300,000 starting in this year;
P600,000 at the end of one year, unknown payment at the end of three
years and the final pa yment at the end of sixth year. The difference
of the present worth of the unknown payment from the present worth of
final payment yields to 20% of the price of the lot. The interest of
this whole payment is 16% compounded annually. Draw the cash flow
diagram.
a. What was the unknown payment at the end of three years?
b. What was the final payment at the end of sixth year?
c. What would be the annual deposit if the interest is compounded
semi-annually?
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