Anna purchases a smartphone for P28,000. She makes a 15% down payment and agrees to repay the balance in 12 monthly payments. If the finance charge on the balance is 7.5%, estimate the annual percentage rate.

Anna purchases a smartphone for P28,000. She makes a 15% down payment and agrees to repay the balance in 12 monthly payments. If the finance charge on the balance is 7.5%, estimate the annual percentage rate.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 15P

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Concept explainers

Amortized Loans

The term "amortization" refers to spreading the value of a loan or a debt over a series of regular payments or installments comprising of both the principal and interest amount. It generally involves the process where in the value of a loan or an intangible asset is written down over its maturity period.

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