Mr. Cruz agreed to pay Mr. Toledo 100,000 at the end of 5 years. How much should Mr. Cruz pay now to settle his account if Mr. Toledo agrees that money is worth (a) 8-1/2% simple interest, (b) 9-1/2% simple interest? Which rate is advantageous for Mr. Cruz and for Mr. Toledo?
Mr. Cruz agreed to pay Mr. Toledo 100,000 at the end of 5 years. How much should Mr. Cruz pay now to settle his account if Mr. Toledo agrees that money is worth (a) 8-1/2% simple interest, (b) 9-1/2% simple interest? Which rate is advantageous for Mr. Cruz and for Mr. Toledo?
Chapter3: Income Sources
Section: Chapter Questions
Problem 85P
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Mr. Cruz agreed to pay Mr. Toledo 100,000 at the end of 5 years. How much should Mr. Cruz pay now to settle his account if Mr. Toledo agrees that money is worth (a) 8-1/2% simple interest, (b) 9-1/2% simple interest? Which rate is advantageous for Mr. Cruz and for Mr. Toledo?
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