Mr. Dickenson Comperstaugh bought an old model Ferrari car for 1,000,000.00 pesos down payment and 10 deferred semiannual payments of 150,000.00 peso starting 3 years from now. If the interest rate is 12%compounded semi-annually, what is the present worth of the car?

Mr. Dickenson Comperstaugh bought an old model Ferrari car for 1,000,000.00 pesos down payment and 10 deferred semiannual payments of 150,000.00 peso starting 3 years from now. If the interest rate is 12%compounded semi-annually, what is the present worth of the car?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter19: Lease And Intermediate-term Financing

Section: Chapter Questions

Problem 19P

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Concept explainers

Mortgages

A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.

Mortgage

The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.

Question

Mr. Dickenson Comperstaugh bought an old model Ferrari car for
1,000,000.00 pesos down payment and 10 deferred semiannual
payments of 150,000.00 peso starting 3 years from now. If the
interest rate is 12%ocompounded semi-annually, what is the
present worth of the car?

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