Solution: What is the cash price of the property?

A house and lot can be acquired by a downpayment of P500,000 and a yearly payment of P100,000 at the end of each year for a period of 10 years, starting at the end of 5 years from the date of purchase. If money is worth 14% compounded annually, what is the cash price of the property?

Problem Statement: ME Board April 1998

A house and lot can be acquired by a downpayment of P500,000 and a yearly payment of P100,000 at the end of each year for a period of 10 years, starting at the end of 5 years from the date of purchase. If money is worth 14% compounded annually, what is the cash price of the property?

• A. P806,899.33
• B. P807,100.12
• C. P807,778.12
• D. P808,835.92

The cash price of the property is P808,835.92.

Solution:

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