document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1105019>Question 1105019</A>: <I><SPAN STYLE=\"word-break: break-all;\"> allan bought a household appliance with payments of 3500 every end of quarters for 2 years and 6 months. \r<BR>\n" );
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document.write( "he made a down payment of 6000 to start with. \r<BR>\n" );
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document.write( "if money is worth 8% compounded quarterly, find the equivalent cash price of the appliance </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #719804 by </B><A HREF=/tutors/aboutme.mpl?userid=Theo><B>Theo(13342)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=Theo><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/cgi-bin/show-face.mpl?user=Theo><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=719804\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> if i understand this correctly, he put 6000 down and then made payments of 3500 at the end of each quarter for 2 and 1/2 years.\r<BR>\n" );
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document.write( "the annual interest rate is 8% / 100 = .08 per year.\r<BR>\n" );
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document.write( "the quarterly interest rate is .08 / 4 = .02 per quarter.\r<BR>\n" );
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document.write( "to find the equivalent cash price of the appliance, you have to find the present value of the payments at 2% per quarter.\r<BR>\n" );
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document.write( "time point 0 is when he made the purchase<BR>\n" );
document.write( "time point 0 is the beginning of the first quarter.\r<BR>\n" );
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document.write( "time point 1 is the end of the first quarter.<BR>\n" );
document.write( "time point 2 is the end of the second quarter.<BR>\n" );
document.write( "etc.\r<BR>\n" );
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document.write( "you have 10 quarters.\r<BR>\n" );
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document.write( "at time point 0, you shell out 6000.<BR>\n" );
document.write( "at time points 1 through 10, you shell out 3500.\r<BR>\n" );
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document.write( "the present value of these cash flows is the equivalent cash price of the appliance.\r<BR>\n" );
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document.write( "the following excel spreadsheet shows the individual calculations.\r<BR>\n" );
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document.write( "<IMG STYLE=\"max-width:80%;\" src = \"http://theo.x10hosting.com/2017/121804.jpg\" alt=\"$$$\">\r<BR>\n" );
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document.write( "the sum of the present value of the cash flow at an interest rate of .02 perquarter is the equivalent cash price of the appliance.\r<BR>\n" );
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document.write( "that would be $43,013.69.\r<BR>\n" );
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document.write( " </SPAN>\n" );
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