LEGE FOURDAthe aths. Company B oftfers P25, 000 at the end of each quarter for the nextHoars, Assume the money is worth 8% compounded annually.Na end of 3 years pius P300, 000 at the end of 5 years by paying every 6A Offers P150 000 atINTERVENTIONACTIVITY 4: Solve the following problems and show your solutions.1. A refrigerator is for sale at P17, 999 in cash or on terms, P1 600 eachmonth for the next 12 months. Money is 9% compounded monthly. Which islower, the cash price or the present value of the installment terms?1902EAM13(062) 2251 406blanciacollege@yah oo.BLANCIA

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Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA3: Time Value Of Money

Section: Chapter Questions

Problem 3CE

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Marathon Peanuts converts a $130,000 account payable into a short-term note payable, with an annual interest rate of 6%, and payable in four months. How much interest will Marathon Peanuts owe at the end of four months? A. $2,600 B. $7,800 C. $137,800 D. $132,600
Electro Corporation bought a new machine and agreed to pay for it in equal annual installments of 5,000 at the end of each of the next 5 years. Assume a prevailing interest rate of 15%. The present value of an ordinary annuity of 1 at 15% for 5 periods is 3.35. The future amount of an ordinary annuity of 1 at 15% for 5 periods is 6.74. The present value of 1 at 15% for 5 periods is 0.5. How much should Electro record as the cost of the machine? a. 12,500 b. 16,750 c. 25,000 d. 33,700
Bank A offers Php 89000 at the end of 2 years plus Php 20000 at the end of 4 years. Bank 8 offers Php 25000 at the end of each semi-annually for the next 4 years. Assume that the money is worth 3.8% compounded annually. Which offer has a better market value? Round off your answers in 2 decimal places.
1. Investment in Sunrise Company is P 100,000 at the end of 5 years plus P 24,000 annually for 4 years afterwards. Investment in XYZ company offers P 50,000 semi-annually P 15,000 every 6 months after 6 years. Assume that the money is worth 9% compounded annually, which investment is preferable?
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INTERVENTION ACTIVITY 4: Solve the following problems and show your solutions. 1. A refrigerator is for sale at P17, 999 in cash or on terms, P1 600 each month for the next 12 months. Money is 9% compounded monthly. Which is lower, the cash price or the present value of the installment terms?