Answered: Company makes payments of $1,800 at the…

Business

Finance

Company makes payments of $1,800 at the end of every month, how long will it take to settle the loan?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 1EA: Halep Inc. borrowed $30,000 from Davis Bank and signed a 4-year note payable stating the interest...

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Concept explainers

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.

Question

Lush Gardens Co. bought a new truck for $58,000. It paid $6,380 of this amount as a
down payment and financed the balance at 4.70% compounded semi-annually. If the
company makes payments of $1,800 at the end of every month, how long will it take to
settle the loan?
o years
o months
Express the answer in years and months, rounded to the next payment period
13
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