Question

1. Get purchase price on start of term

2. Amortize the purchase price to get price on acquisition date
3. Add accrued interest

Answer 1

This question involves calculating the purchase price, amortizing it over time, and adding accrued interest.

Step-by-step explanation:

In this question, we are dealing with the concepts of simple interest and how it relates to the purchase price of an item over a specific period of time.

First, we need to determine the purchase price at the start of term. This is the initial amount that was paid to acquire the item.

Next, we need to amortize the purchase price, which means spreading out the cost over time. We do this by calculating the total cost of buying the item in each time period. For example, if there are three time periods, we would calculate the total cost for each period.

Finally, we add any accrued interest to the amortized purchase price. Accrued interest is the amount of interest that has accumulated over time, based on the purchase price and the applicable interest rate.