A company purchased a land by signing a note with the seller, requiring $100,000 down payment, payment of $120,000 one year from purchase, and $80,000 three years from the purchase. The note is a non-interest bearing, but the going rate for similar notes is 10%. PV of 1 at 10% for 1 period is 0.91. PV of 1 at 10% for 3 periods is 0.75. How much is the cost of land acquired?
Mortgages
A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.
Mortgage
The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.
A company purchased a land by signing a note with the seller, requiring $100,000 down payment, payment of $120,000 one year from purchase, and $80,000 three years from the purchase. The note is a non-interest bearing, but the going rate for similar notes is 10%. PV of 1 at 10% for 1 period is 0.91. PV of 1 at 10% for 3 periods is 0.75. How much is the cost of land acquired?
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