Kina made a loan under ABC Inc. amounting to P120,000 pesos on January 1, 2015. The following year, he deposited P60,000 to partially pay his loan. On January 1, 2017, Kina borrowed P40,000 from the same loaning institution, on top of his existing balance. If Kina plans to make two payments on January 1, 2020 and January 1, 2021 to settle his loan with ABC Inc., how much should the two payments be? Assume that the amount of the payment to be made on January 1, 2021 is twice the payment to be made on January 1, 2020 and that both loans have an interest rate of 10% compounded quarterly. Construct a cash flow diagram to support your solution.

Kina made a loan under ABC Inc. amounting to P120,000 pesos on January 1, 2015. The following year, he deposited P60,000 to partially pay his loan. On January 1, 2017, Kina borrowed P40,000 from the same loaning institution, on top of his existing balance. If Kina plans to make two payments on January 1, 2020 and January 1, 2021 to settle his loan with ABC Inc., how much should the two payments be? Assume that the amount of the payment to be made on January 1, 2021 is twice the payment to be made on January 1, 2020 and that both loans have an interest rate of 10% compounded quarterly. Construct a cash flow diagram to support your solution.

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter6: Business Expenses

Section: Chapter Questions

Problem 75IIP

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