Solution: What is the annual interest rate for the time payments?

A piece of machinery can be bought for P10,000 cash or for P2,000 down and payments of P750 per year for 15 years. What is the annual interest rate for the time payments?

What is the annual interest rate for the time payments?

Problem Statement: ME Board April 1998

A piece of machinery can be bought for P10,000 cash or for P2,000 down and payments of P750 per year for 15 years. What is the annual interest rate for the time payments?

  • A. 4.61%
  • B. 4.71%
  • C. 4.41%
  • D. 4.51%

Problem Answer:

The annual interest rate for the time payments is 4.61%.

Solution:

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