Polly purchased a car. She paid ₱250,000 as down payment, and ₱15,000 payable at the beginning of each month for 48 months. If money is worth 12% compounded monthly, what is the equivalent cash price of the car?

Polly purchased a car. She paid ₱250,000 as down payment, and ₱15,000 payable at the beginning of each month for 48 months. If money is worth 12% compounded monthly, what is the equivalent cash price of the car?

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 25PROB

See similar textbooks

Related questions

Q: ike Bank starts with $3000 in bank capital. It then accepts $2000 in deposits. It keeps 25 percent…

A: Here, Bank Capital is $3,000 Deposits of Bank is $2,000 Reserve is 25% of Deposits which is equal to…

Q: Explain each of the investment instruments stated below that offered by financial institutions.…

A: A financial instrument can also be considered a tradable asset or a block of tradable capital. Most…

Q: Q)Suppose that in 2018 the price index was 120 and Ifikile purchased R35 000 worth of bonds. One…

A: Concept. Real after tax interest . It is actual benefit of investment after considering into account…

Q: uhere symbols have therir usual iméaniogi

Q: QUESTION 4 Which of the following statements are correct? Pick two correct answers. Deposits are…

A: Deposits normally created by the bank when some one new customer open account with in the bank and…

Q: Suppose a seven-year, $1,000 bond with a 7.8% coupon rate and semiannual coupons is trading with a…

A: Solution:- The bond pays a fixed amount to its holders every period. This is called coupon. On the…

Q: The Hong Kong, A. Money Authority is responsible for exchange rate stability. B. Monetary D.…

A: The Hong Kong Money Authority is responsible for exchange rate stability. Therefore, the answer is…

Q: How did they get net cash inflow in this problem? I don't need anything else solved, just need to…

A: Data given: Sale of prototype chips in 2021 = 595 Sale of prototype chips in 2022 = 595+85= 680 Sale…

Q: city of Oak Ridge is evaluating three mutually exclusive landscaping plans for refurbishing a public…

A: B/C ratio is benefit to cost can be found as present value of annual benefits to initial investment…

Q: (b) ABC plc and DEF plc have exactly the same risk, and both have a current stock price of £150. ABC…

A: Given: Current stock price of ABC is 150 Current stock price of DEF is 150 Stock price of ABC, 1…

Q: o. Denive Lu uhere symbols have their usual meonings

A: F=1+in-1iAF = Future valuei = interest raten=number of periodA=Annuity amountFuture value…

Q: (b) What do you mean by payback period? What are their significano:s and drawbacks? Find the payback…

A: Payback period is a method to appraise capital investment projects. It is the time required for a…

Q: 2- A man wants to reach S 10000 money seven years from now in his bank account. He plans to make…

A: The concept of the time value of money states that the same amount of money is worth more today than…

Q: Trae needs to buy a car, but he doesn’t have any money for a down-payment and can only afford $190…

A: Time value of money (TVM) refers to the method used to measure the amount of money at different…

Q: just sold your house for $1,000,000 in cash. Your mortgage was originally a 30-year mortgage with…

A: Mortgages are paid by equal monthly payments and these payments carry the payment of principal…

Q: Suppose you are asked to value, using a four-period risk-neutral binomial approach, an at-the-money…

A: Working: Up factor (u) = 1.10 and down factor (d) = 0.95 Stock Value in year 1 if increase =…

Q: The following table represents the cashflows (in rand) of a company. Year Cash flows 3 40000 5…

A: The Modified Internal Rate of return: The modified rate of return is a useful measure to evaluate…

Q: Production, Direct Labor, Direct Materials, Sales Budgets, Budgeted Contribution Margin Greiner…

A: Answer- Working Note : Greiner Company Production Budget For the First Quarter of the…

Q: Given the scenario that a treasury bond will be paying a lump sum of $1,000 exactly 3 years from…

A: Face Value = $1,000 Time Period = 3 Years Interest Rate = 6% compounded semiannual

Q: Gabriel put 6000 in a 2 year CD paying 4% interest, compounded monthly. After 2 years he withdrew…

A: Investment amount (P) = 6000 Interest rate = 4% Monthly interest rate (r) = 0.33333333333333% Period…

Q: Capital Asset Pricing Model a) describe the model b) what are the assumptions in the model c)…

A: a) CAPM Model CAPM model ideally portrays the relationship between systematic risk and the expected…

Q: Operating cycle of JFC * STATEMENT OF FINANCIAL POSITION AND INCOME STATEMENT OF 3 COMPANIES AS…

A: Operating cycle is the time from beginning of the production process to collection of csh from…

Q: Consider three securities that will pay risk-free cash flows over the next three years and that have…

A: The cash flows of Security B4 can be replicated by buying 5 units of Security B1 and 2 units of…

Q: Capital Asset Pricing Model

A: The Capital Asset Pricing Model Is also known as CAPM. CAPM shows the relationship between…

Q: Harvey manufacturing company expected in 2021 to have 18% increase in sales compared to 2020 sales…

A: Retained earnings of a company are those profits earned by the company but not distributed to the…

Q: 8. Suppose a certain bond sold a volume of 2, 375, 000. If the bonds sold for $824.99, calculate the…

A: Given, Meaning of bond, Its an instrument of debt which is floated by an organization for the debt…

Q: 1. If you wished to calculate a stock's 5% daily VAR using historical data. If you had 2000 data…

A: The Value at Risk: The Value at Risk (VaR) is a metric that is used to quantify the worst potential…

Q: lease desenbe four different isks with examples in the banking sector.

A: The danger of losing money on an investment or business endeavour is known as financial risk. Credit…

Q: Too much money in an economy with too little goods and services creates:

A: High amount of money in the market with little goods or services will create an imbalance in the…

Q: Two investments have the following pattern of expected retuns: Year 1 $5,100 Year 2 $10,100…

A: BTIRR is the before tax internal rate of return of the cash flows. It is the rate at which the net…

Q: A family purchased a home in Los Gatos, CA in 1971 for $110,000. That same home cost a different…

A: Inflation adjustment using Consumer Price Index (CPI) can be a measure of computing the true cost of…

Q: Question 5: Find the missing EAR and APR in each of the following cases: APR Number of Times…

A: Effective rate is computed based on its compounding period and Effective rate always equal to or…

Q: I. Find the trade discount and net price. Round to the nearest cent. Trade Discount List Price Trade…

A: Solution: Trade discount is the discount given on listed price in the normal course of business. The…

Q: Suppose a French bottle of champagne costs 20.5 euros. Instructions: Enter your responses rounded to…

A: The price of a currency in relation to another currency is called exchange rate. Exchange rate helps…

Q: Hack Wellington Co. is considering a three-year project that will require an initial investment of…

A: PV of Outflow = $35000 PV of Inflow under good condition = 40000*a<3> = 40000*(1-(1+i)^-n)/i =…

Q: Use the following information: Stock A B Good state 10% 14% Bad state 2% -2% Assume there is 60%…

A: The probabilities of expected standard deviation for various scenarios can be used to compute the…

Q: How much will the coupon payments be of a 10-year $1,000 bond with a 9.5% coupor rate and quarterly…

A: Par value = $1000 Coupon rate = 9.5% Number of coupon payment per year = 4

Q: You are evaluating the balance sheet for Goodman bees corporation from the balance sheet you find…

A: Business requires funds to make investments and to meet the day to day financial need. Amount which…

Q: 7. Calculating Cost of Debt For the firm in Problem 6, suppose the book value of the debt issue is…

A: Market value refers to the price at which an item is sold on the open market, and it is also used to…

Q: cede and cos expect its ebit = 11000 every year forever. the company can borrow at 8% the company…

A: An organization can raise funds either through debt issue or equity issue. Weighted average cost of…

Q: What are the most important developments in the financial markets over the past 40 years?

A: Any market in which securities are traded is referred to as a financial market, which includes stock…

Q: IV. Complete the table. Round to the nearest cent. Invoice Date Last Date to Take Last Date to Date…

A: “Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

Q: what is the expected return on a portfolio that is invested 70 in k and 30 given the following…

A: Average Return in scenario 1 = (16+13)/2 = 14.5% Average Return in scenario 2 = (12+8)/2 = 10%

Q: Planet has just announced an ordinary dividend per share of 20p. The past four years’ dividends per…

A: Share is a company’s securities which are issued to raise the funds. Value of share fluctuates due…

Q: $10,000 zero coupon bonds is redeemed at par in 4 years. The average annual discount rate is 7%.…

A: Par value of the bond = $10,000 Discount rate (r) = 0.07 Maturity period (p) = 4 Years Maturity…

Q: You are faced with making a decision on a large capital investment proposal. The capital investment…

A: Concept. Annual worth (Aw) , ERR and IRR are capital budgeting methods used to evaluate the…

Q: Verga plc has 10,000,000 shares and £16,000,000 current earnings, from which it distributes 50% as…

A: Here,

Q: The correct answer is 9.1978 Please explain

A: The provided solution is correct. But the expert rounded the final answer to two decimals.

Q: A municipal bond with a face value of $10,000 and bond interest rate of 8% per year payable…

A: Face Value $ 10,000.00 Coupon rate 8% Time Period 30 Yield 12% Time Passed 10

Q: A buyer earns $48,000 salary per year. In order to qualify for an 85 percent loan, his monthly PITI…

A: Introduction = Every person needs loan to buy his house, to run his business, education loan etc.…

Concept explainers

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.

Question

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

Step 2

Step 3

Step 4

Step by step

Solved in 4 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

Polly purchased a car. She paid ₱150,000.00 as down payment, and ₱5,500.00 payable at the beginning of each month for 48 months. Money is worth 12% compounded monthly.What is the periodic rate? How many payments must be made? What is the equivalent cash price of the car?
Polly purchased a car. She paid ₱150,000.00 as down payment, and₱5,500.00 payable at the beginning of each month for 48 months. Money is worth 12% compounded monthly. What is the periodic rate? How many payments must be made? What is the equivament cash price of the car?
Panpan purchased a car. She paid ₱250,000.00 as down payment, and ₱5,500.00 payable at the beginning of each month for 48 months. Money is worth 12% compounded monthly. Compute the periodic rate, how many payments should be made? and what is the equivalent cash price of the car?
Panpan purchased a car. She paid ₱150,000.00 as down payment, and ₱5,500.00 payable at the beginning of each month for 48 months. Money is worth 12% compounded monthly. What is the equivalent cash price of the car?
Polly purchased a car. She paid ₱150,000.00 as down payment, and₱5,500.00 payable at the beginning of each month for 48 months. Money is worth 12% compounded monthly.a.) What is the periodic rate?b.) How many payments must be made?c.) What is the equivalent cash price of the car?
Jungkook purchased a new car under these terms: 800,000 php downpayment and 17,500 php each month for 5 years. If the interest is 12% compounded monthly, what is the cash price of the car?
Engineer Patawaran purchased a lot and agreed to pay Php 33,000.00 a month for two years. If money is worth 9% compounded monthly, what single payment at the end of 2 years would be equivalent to his total monthly payments
Polly purchased a car. She paid ₱150,000 as down payment and pays ₱5,500 at the end of each month for 48 months. If the interest is 7.8% compounded monthly, how much was the car worth?
A woman paid $99,000 down for a house and agreed to pay 18 quarterly payments of $4,900 each. If money is worth 4% compounded quarterly, how much (in $) would the house have cost if she had paid cash?
Panpan purchased a car. She paid ₱150,000.00 as down payment, and ₱5,500.00 payable at the beginning of each month for 48 months. Money is worth 12% compounded monthly. How many payments must be made?
A woman paid $98,000 down for a house and agreed to pay 18 quarterly payments of $4,100 each. If money is worth 4% compounded quarterly, how much (in $) would the house have cost if she had paid cash? (Round your answer to the nearest cent.)
Lupe made a down payment of $8000 towards the purchase of a new car. To pay the balance of the purchase price, she has secured a loan from her bank at the rate of 12% compounded monthly. Under the terms of her finance agreement, she is required to make payments of $420 per month for 36 months. What is the cash price of the car?