Answered: A real estate developer bought land for…

A real estate developer bought land for $170 000.00 down and monthly payments of $8 450.00 for 5 years. What is the equivalent cash price if money is worth 8.75% compounded semi- annually?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 20EB: Taos Productions bought a piece of equipment for $79,860 that will last for 5 years. The equipment...

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Concept explainers

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.

Question

A real estate developer bought land for $170
000.00 down and monthly payments of $8 450.00
for 5 years. What is the equivalent cash price if
money is worth 8.75% compounded semi-
annually?
Answer is 580,948.84 but I need the solution
without using a financial calculator. Manual
solutions please.

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