1. Robert borrowed a certain sum of money from Joey on June 1, 1994 and signed a note promising to pay him a total of P 20,000 at the end of 5 years. Joey sold this promissory note to Peter on June 1, 1997. If Peter insists on discounting the note at 5% compounded quarterly, what will he pay for the note? 2. In this regard to the promissory note on Problem 1, Robert gets permission to delay his payment until June 1, 2999, under the assumption that money is worth 5% compounded quarterly after the note measures. What final payment is Robert required to make?
1. Robert borrowed a certain sum of money from Joey on June 1, 1994 and signed a note promising to pay him a total of P 20,000 at the end of 5 years. Joey sold this promissory note to Peter on June 1, 1997. If Peter insists on discounting the note at 5% compounded quarterly, what will he pay for the note? 2. In this regard to the promissory note on Problem 1, Robert gets permission to delay his payment until June 1, 2999, under the assumption that money is worth 5% compounded quarterly after the note measures. What final payment is Robert required to make?
Chapter3: Income Sources
Section: Chapter Questions
Problem 32P
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Transcribed Image Text:1. Robert borrowed a certain sum of money from Joey on June 1, 1994 and signed a note
promising to pay him a total of P 20,000 at the end of 5 years. Joey sold this promissory
note to Peter on June 1, 1997. If Peter insists on discounting the note at 5% compounded
quarterly, what will he pay for the note?
2. In this regard to the promissory note on Problem 1, Robert gets permission to delay his
payment until June 1, 2999, under the assumption that money is worth 5% compounded
quarterly after the note measures. What final payment is Robert required to make?
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