Heathcliff owes $10,000.00 bearing interest at 6% c.m. for 5 years. Six months before the due date, the debt is commuted into two equal payments, one due in 6 months and another due in 18 months. The new interest rate is set at 8% cq. Determine the payment size.

Heathcliff owes $10,000.00 bearing interest at 6% c.m. for 5 years. Six months before the due date, the debt is commuted into two equal payments, one due in 6 months and another due in 18 months. The new interest rate is set at 8% cq. Determine the payment size.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter12: Current Liabilities

Section: Chapter Questions

Problem 12EA: Scrimiger Paints wants to upgrade its machinery and on September 20 takes out a loan from the bank...

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Heathcliff owes $10,000.00 bearing interest at 6% c.m. for 5 years. Six months
before the due date, the debt is commuted into two equal payments, one due in 6
months and another due in 18 months. The new interest rate is set at 8% c.q.
Determine the payment size.

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