A debtor owes Php 22,000 due at the end of 2 years. He asks his creditors for the privilege of paying the debt immediately. At what simple interest, 6% or 8%, would the creditor prefer to compute the required present value, and how much would he gain by the better choice?

A debtor owes Php 22,000 due at the end of 2 years. He asks his creditors for the privilege of paying the debt immediately. At what simple interest, 6% or 8%, would the creditor prefer to compute the required present value, and how much would he gain by the better choice?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter12: Current Liabilities

Section: Chapter Questions

Problem 16Q: Jain Enterprises honors a short-term note payable. Principal on the note is $425,000, with an annual...

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Question

A debtor owes Php 22,000 due at the end of 2 years. He asks his creditors for the privilege of paying
the debt immediately. At what simple interest, 6% or 8%, would the creditor prefer to compute the
required present value, and how much would he gain by the better choice?

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