A man bought an equipment costing P60,000 payable in 12 quarter payments, each installment payable at the beginning of each period. The interest is 24% compounded quarterly. What is the amount of each payment? P6,751.53 P7,371.91 P5,170.12 P8,241.74

A man bought an equipment costing P60,000 payable in 12 quarter payments, each installment payable at the beginning of each period. The interest is 24% compounded quarterly. What is the amount of each payment? P6,751.53 P7,371.91 P5,170.12 P8,241.74

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter12: Current Liabilities

Section: Chapter Questions

Problem 15MC: Marathon Peanuts converts a $130,000 account payable into a short-term note payable, with an annual...

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Concept explainers

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.

Question

A man bought an equipment costing P60,000 payable in 12 quarter payments,
each installment payable at the beginning of each period. The interest is 24%
compounded quarterly. What is the amount of each payment?
P6,751.53
P7,371.91
P5,170.12
P8,241.74

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