Question 1197200: Mr. Lim owes Mr. Tan P150,000.00 due in 4.5 years. On the 3rd year, Mr. Lim pays P80,000.00. If the money is worth 9% compounded semi-annually, how much does Mr. Lim have to pay on the 6th year to discharge the rest of his obligation?
Answer by Theo(13342)   (Show Source):
You can put this solution on YOUR website! on the third year, payment of 80,000 is made.
money is 9% compounded semi-annually.
9% / 2 = 4.5% every half year.
by the third year, the money owed is 150,000 * 1.045 ^ 6 = 195,339.0187.
the payment of 80,000 is made, reducing the money owed to 115,339.0187.
the 6th year is 3 more years from the third year.
the money owed at the end of the 6th year is 115.339.0187 * 1.045 ^ 6 = 150,201.4849.
round to the nearest penny = 150,201.48.
let me know if you have any questions.
theo
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