question archive Hotel Victoria purchased a new building for $150,000 in Brisbane, Australia
Hotel Victoria purchased a new building for $150,000 in Brisbane, Australia
Subject:FinancePrice: Bought3
Hotel Victoria purchased a new building for $150,000 in Brisbane, Australia. It paid $25,000 down and agreed to sign a leasing contract with a bank for the next 10 years in 10 equal end-of-year payments plus 10 percent compound interest on the balance due. A. How much should the hotel pay each end of each year ......? PV = PMT X (Factor) Equation 5-4, Page 194 PMT-PV / (Factor) $125,000 - PMT (10,10%) $125,000 = PMT (6.1446) PMT = 125,000/6.1446 PMT = $20, 343.17 B. Recalculate, assuming the payment are semi-annual. (end of June & end of Dec) C. Recalculate A, assuming the payment is due at the beginning of each year D. Explain the difference in the payment between option A, B, and C
