In: Accounting
A Vending Machine costs P75.000 if paid in cash. On the installment plan, a purchaser should pay P40,000 down payment and 8 quarterly installments, the first due at the end of the first year after purchase. If money is worth 15% compounded monthly, determine the quarterly installment.
*CASH FLOW Diagram Needed
Answer to Question No. 1 | |
Particulars | Amount(P) |
Amount of loan financed- (Purchase amount- down payment) | 35,000.00 |
No. Of quarterly instalment payments | 8 |
Annual stated Rate (compounded monthly) | 15.00% |
Monthly interest rate | 1.25% |
Effective Quarterly Interest rate | 3.80% |
Future value after 9 month | 39,140.23 |
Quarterly Instalments payment amount | 5,764.80 |
Amortization table | ||||
Quarter |
Interest expenses |
Quarterly payment |
Principle repayment |
Outstanding Principle |
0 | 35,000.00 | |||
1 | 1,328.97 | - | - | 36,328.97 |
2 | 1,379.44 | - | - | 37,708.41 |
3 | 1,431.81 | - | - | 39,140.23 |
4 | 1,486.18 | 5,764.80 | 4,278.62 | 34,861.61 |
5 | 1,323.72 | 5,764.80 | 4,441.08 | 30,420.53 |
6 | 1,155.09 | 5,764.80 | 4,609.71 | 25,810.82 |
7 | 980.06 | 5,764.80 | 4,784.74 | 21,026.08 |
8 | 798.37 | 5,764.80 | 4,966.42 | 16,059.66 |
9 | 609.80 | 5,764.80 | 5,155.00 | 10,904.65 |
10 | 414.06 | 5,764.80 | 5,350.74 | 5,553.91 |
11 | 210.89 | 5,764.80 | 5,553.91 | -0.00 |