Rate and factor rates should be rounded off to 6 decimal places for the computation amortization. The monthly amortization should be rounded off to 2 decimal places (cen For the add-on interest computation, interest and monthly interest should be round nearest 2 decimal places (centavos). Mr. Aldrin and Mrs. Aileen Pereda are engaged in several businesses. Mr. Aldrin Pe freelance property consultants for various real estate developer. He also co own and ma his only son, Aldrin Patrick, a business firm engage in providing services for air-co installation, repair and maintenance. Father and son is thinking of buying a brand-new
Rate and factor rates should be rounded off to 6 decimal places for the computation amortization. The monthly amortization should be rounded off to 2 decimal places (cen For the add-on interest computation, interest and monthly interest should be round nearest 2 decimal places (centavos). Mr. Aldrin and Mrs. Aileen Pereda are engaged in several businesses. Mr. Aldrin Pe freelance property consultants for various real estate developer. He also co own and ma his only son, Aldrin Patrick, a business firm engage in providing services for air-co installation, repair and maintenance. Father and son is thinking of buying a brand-new
Chapter6: Deductions And Losses: In General
Section: Chapter Questions
Problem 55P
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Question
If you are the financial consultant of the Pereda family, which financing option will you suggest that Mr. Pereda choose and why?
Transcribed Image Text:Rate and factor rates should be rounded off to 6 decimal places for the computation of monthly
amortization. The monthly amortization should be rounded off to 2 decimal places (centavos).
For the add-on interest computation, interest and monthly interest should be rounded off to
nearest 2 decimal places (centavos).
Mr. Aldrin and Mrs. Aileen Pereda are engaged in several businesses. Mr. Aldrin Pereda is a
freelance property consultants for various real estate developer. He also co own and manage with
his only son, Aldrin Patrick, a business firm engage in providing services for air-conditioning
installation, repair and maintenance. Father and son is thinking of buying a brand-new Mitsubishi
L300 FB utility vehicle to replace their old one. The list price of a brand-new Mitsubishi L300 FB
van is P813,000.00.
The product specialist from Mitsubishi outlet they talked to suggested 2 financing schemes from
their financial institution partners. The 2 schemes are as follows:
Bank of Philippine Islands
Orix Metro Leasing
Regular Utility Vehicle Loan
Regular Auto Loan
Down payment of 15% on the amount of the Down payment of 30% on the amount of the
vehicle
vehicle
Loan Term is 5 years
Payable in equal monthly amortization
Loan Rate is 10.93% per annum
Simple interest
Loan Term is 5 years
Payable in monthly installments
Loan Rate is 10.93% per annum.
Add-on interest
Mr. Aldrin Pereda and family however, only has a total of P130,000.00 in the bank. If you are the
financial consultant of the Pereda family, which financing option will you suggest that Mr.
Pereda choose and why?
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