Your grandparents have decided to sell their real estate property in the Province of lloilo and they are planning to buy a property in lloilo City. They posted an online advertisement for this. Two offers came: • Offer 1 : P500,000 down payment plus P1,500,000 lump-sum payment 10 years from now Offer 2 : P500,000 down payment plus P12,500 per month for 10 years Which among the 2 offers should your grandparents choose if the payment will have an interest of 12% compounded monthly? Find the fair market value of the two offers.

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
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Your grandparents have decided to sell their real estate
property in the Province of lloilo and they are planning to buy a property in
Iloilo City. They posted an online advertisement for this. Two offers came:
Offer 1 : P500,000 down payment plus P1,500,000 lump-sum
payment 10 years from now
• Offer 2 : P500,000 down payment plus P12,500 per month for 10
years
Which among the 2 offers should your grandparents choose if the payment
will have an interest of 12% compounded monthly? Find the fair market
value of the two offers.
Transcribed Image Text:Your grandparents have decided to sell their real estate property in the Province of lloilo and they are planning to buy a property in Iloilo City. They posted an online advertisement for this. Two offers came: Offer 1 : P500,000 down payment plus P1,500,000 lump-sum payment 10 years from now • Offer 2 : P500,000 down payment plus P12,500 per month for 10 years Which among the 2 offers should your grandparents choose if the payment will have an interest of 12% compounded monthly? Find the fair market value of the two offers.
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