To pay for a farm, Berti has to make equal payments of P135,900.00 at the beginning of each six months for eight years. Find the cash price for the farm, if money is worth 11% compounded semi-annually. Solve the problem and show the solution.

To pay for a farm, Berti has to make equal payments of P135,900.00 at the beginning of each six months for eight years. Find the cash price for the farm, if money is worth 11% compounded semi-annually. Solve the problem and show the solution.

Excel Applications for Accounting Principles

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

Chapter27: Time Value Of Money (compound)

Section: Chapter Questions

Problem 5E

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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.

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To pay for a farm, Berti has to make equal payments of P135,900.00 at the beginning of each six months for eight years. Find the cash price for the farm, if money is worth 11% compounded semi-annually. Solve the problem and show the solution.

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