4. Mr. Torres borrows P 150,000 and agrees to pay it with interest at 16 % compounded quarterly installments of P 10,000 each as long as necessary. If the first payment is due 3 months after borrowing the money, how long will it take for him to settle his debt?

4. Mr. Torres borrows P 150,000 and agrees to pay it with interest at 16 % compounded quarterly installments of P 10,000 each as long as necessary. If the first payment is due 3 months after borrowing the money, how long will it take for him to settle his debt?

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 19PROB

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Concept explainers

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.

Question

4. Mr. Torres borrows P 150,000 and agrees to pay it with interest at 16 %
compounded quarterly installments of P 10,000 each as long as necessary. If the first
payment is due 3 months after borrowing the money, how long will it take for him to
settle his debt?

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