A present obligation amounting to ₱150,000 is to be repaid for 4 years at a rate of 12% per year. The borrower has three options to repay the money, what would you recommend? a. Pay the interest and principal in one payment at the end of the period. b. Pay interest due to at the end of each period and the principal at the end of the 4th year. c. Pay 50% of the principal at the end of the first year and 50% at the end of the 4th year. The interest will be paid at each end of the year PROBLEM 3. A present obligationamounting to P150,000 is to be repaid for4 years at a rate of 12% per year. Theborrower has three options to repay themoney, what would you recommend?a. Pay the interest and principal in onepayment at the end of the period.b. Pay interest due to at the end of eachperiod and the principal at the end of the4th year.c. Pay 50% of the principal at the end ofthe first year and 50% at the end of the4th year. The interest will be paid at eachend of the year

Under Scenario A Interest Schedule Under Different Scenario Year Opening Balance Interest at…

Answered: at the end of

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section4.17: Amortized Loans

Problem 1ST

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A present obligation amounting to ₱150,000 is to be repaid for 4 years at a rate of 12% per year. The borrower has three options to repay the money, what would you recommend? a. Pay the interest and principal in one payment at the end of the period. b. Pay interest due to at the end of each period and the principal at the end of the 4th year. c. Pay 50% of the principal at the end of the first year and 50% at the end of the 4th year. The interest will be paid at each end of the year

PROBLEM 3. A present obligation
amounting to P150,000 is to be repaid for
4 years at a rate of 12% per year. The
borrower has three options to repay the
money, what would you recommend?
a. Pay the interest and principal in one
payment at the end of the period.
b. Pay interest due to at the end of each
period and the principal at the end of the
4th year.
c. Pay 50% of the principal at the end of
the first year and 50% at the end of the
4th year. The interest will be paid at each
end of the year

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