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What amount must be repaid on October 10, 2019, if Php6,000 is borrowed on October 10, 2011 at 5.75% simple interest?

Excel Applications for Accounting Principles

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

Chapter21: Cash Budgeting (cashbud)

Section: Chapter Questions

Problem 3R: Can the 10,000 note be repaid on May 1? Explain.

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Concept explainers

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.

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8. What amount must be repaid on October 10, 2019, if
Php6,000 is borrowed on October 10, 2011 at 5.75% simple
interest?

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