3. The PC Shop obtains a loan from a finance company. It is to be repaid by quarterny payments of Php 50,000, the first of which is due at the end of 2 years and the lastat the end of 6 years. If the interest rate of the loan is 16% compounded quarterly, how much is the amount borrowed?

3. The PC Shop obtains a loan from a finance company. It is to be repaid by quarterny payments of Php 50,000, the first of which is due at the end of 2 years and the lastat the end of 6 years. If the interest rate of the loan is 16% compounded quarterly, how much is the amount borrowed?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter19: Lease And Intermediate-term Financing

Section: Chapter Questions

Problem 18P

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Concept explainers

Amortized Loans

The term "amortization" refers to spreading the value of a loan or a debt over a series of regular payments or installments comprising of both the principal and interest amount. It generally involves the process where in the value of a loan or an intangible asset is written down over its maturity period.

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3. The PC Shop obtains a loan from a finance company. It is to be repaid by quarteny
payments of Php 50,000, the first of which is due at the end of 2 years and the lastat
the end of 6 years. If the interest rate of the loan is 16% compounded quarterly, how
much is the amount borrowed?

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