A college student borrowed P20,000 from a bank for his tuition fee and promised to pay the amount for one year. He received only the amount of P19200 after the bank collected the advance interest of P800. What was the rate of discount? What was the rate of interest?
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- You pawned your PSP at Pawnshop for P5,000 and agreed to pay theamount at the end of 9 months. The pawnshop gave you P4,000 cash after deductingthe interest in advance. What was the rate of discount?Mr. J. Dela Cruz borrowed money from the bank. He received from the bank P1,340.00 and promised to pay P1,500.00 at the end of 9 months. Determine the simple interest rate and the corresponding discount rate or often referred to as the “Banker’s Discount”.The drug company Pfizer is considering whether to invest in the developing of a new cancer drug. Development will require an initial investment of $10 million now; beginning one year from now, the drug will generate annual profits of $4 million for three years. What is the present discounted value of the drug? Assume the interest rate is i%.
- Use the definition of the effective rates of interest and discount. j=[Amount at s+t - Amount at s] / [Amt at s]. d_j=[Amount at s+t - Amount at s] / [Amt at s+t]. For 8 items c & d, if j (d_j) is nominal then effective interest (resp. discount) every mth of a period is j^(m)/m (resp. d^(m)/m).Compute the discount if $ 2,000 is discounted for 6 months at 8% simple interestJuan dela Cruz borrowed money from a bank. He receives P18T & promised to pay P20T at the end of 6 months. What is the corresponding discount rate?
- True or False 1. A deferred annuity until ? period of ? interest, and A equal payments, can be compensated by paying A times [?/?, ?%, ? + 1] on the ? +1 period. 2. A zero profit implies that this is a breakeven point, and the amount of demand equals the amount of supply.a man loaned P20,000 from a bank which gives a discount rate of 5%. He promised to pay it in a year, how much does he expect to receive.you are the mayor of the smalltown of wasilla and a landowner has offered to sell you 1,000 hectares of woodland for $2,000,000. YOu are very tempted because of the wildlife which live there(such a moose) as well as the recreational value to your constituents . you look at the financial times and see that if you borrow money for this project, the interest rate will be 5% per annum, and so conclude the discount rate you should use 5%. your parks department estimates that annual recreational and environmental benefits will be $100,000 a year. a) looking only at the next 50 years, is buying the woodland a good idea? b) what is the maximum amount you would be willing to pay the landowner to lease the land for 50 years? c)How would your answers to a and b change if the recreational and environmnetal benefits increase by 3% per year, reflecting the fact that wasilla is growing, not only in population but in income of the population?
- Mrs Bruno borrowed money from a bank. She received from the bank P1,342 and promised torepay P1,500 at the end of 10 months. Determine (a) simple interest rate (b) discount offered asBanker’s discount.A bill for a cellphone specifies the cost as P 25,400 due at the end of 100 days but offers a 4% discount for cash in 24 days. What is the highest simple interest rate at which the buyer can afford to borrow money in order to take advantage of the discount?Assume I won 8 million dollars in a lottery. I could take my winnings in installments of 2 million dollars a year for four years or a lump sum of fewer than 8 million dollars. If I take the installments, my first installment would come the day I claimed my winnings at the state lottery office. Assume that the interest rate is 7% per year and that there are no taxes on the winnings. Calculate what the lump sum should be so that it would exactly equal the present value of the stream of the future stream of installments from the lottery. You must show and explain your work to be given credit for this assignment. What would your answer change be if the first installment in the question above did not come until one year after I claimed my winnings. You must show and explain your work to be given credit for this assignment. Just three or four sentences for each question. However, I do need to see your work.
