Jones Corporation borrowed $ 9,000 from Brown Corporation on 1978 and $12,000 on 1980. Jones Corporation made a partial payment of $ 7,000 on 1981. It was agreed that the remaining balance of the loan would be paid by two payments, one on 1982 and the other on 1983, the second being 50% larger than the first. If the interest rate is 12% compounded annually. a) What is the amount of the first payment? b) What is the amount of the second payment?

Jones Corporation borrowed $ 9,000 from Brown Corporation on 1978 and $12,000 on 1980. Jones Corporation made a partial payment of $ 7,000 on 1981. It was agreed that the remaining balance of the loan would be paid by two payments, one on 1982 and the other on 1983, the second being 50% larger than the first. If the interest rate is 12% compounded annually. a) What is the amount of the first payment? b) What is the amount of the second payment?

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section4.17: Amortized Loans

Problem 1ST

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