A contract has been signed to lease a building at P20,000 per year with an annual increase of P1,500 for 8 years. Payments ate to be made at the end of each year, starting one year from now the prevailing interest rate is 7%. What lump sum paid today would be equivalent to the 8 year lease payment plan? (show solutions using a. equation of value
A contract has been signed to lease a building at P20,000 per year with an annual increase of P1,500 for 8 years. Payments ate to be made at the end of each year, starting one year from now the prevailing interest rate is 7%. What lump sum paid today would be equivalent to the 8 year lease payment plan? (show solutions using a. equation of value
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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A contract has been signed to lease a building at P20,000 per year with an annual increase of P1,500 for 8 years.
Payments ate to be made at the end of each year, starting one year from now the prevailing interest rate is 7%. What lump sum paid today would be equivalent to the 8 year lease payment plan? (show solutions using a. equation of value and b. gradient formula)
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