Q1/ An original loan of $2000 was made at 6 percent simple interest per year for 4 years. At the end of this time, no interest had been paid and the loan was extended for 6 more years at a new, effective, compound-interest rate of 8 percent per year. What is the total amount owed at the end of the 10 years if no intermediate payments are made?

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter19: Lease And Intermediate-term Financing
Section: Chapter Questions
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Q1/ An original loan of $2000 was made at 6 percent simple interest per year for 4 years. At the end
of this time, no interest had been paid and the loan was extended for 6 more years at a new,
effective, compound-interest rate of 8 percent per year. What is the total amount owed at the end
of the 10 years if no intermediate payments are made?
Transcribed Image Text:Q1/ An original loan of $2000 was made at 6 percent simple interest per year for 4 years. At the end of this time, no interest had been paid and the loan was extended for 6 more years at a new, effective, compound-interest rate of 8 percent per year. What is the total amount owed at the end of the 10 years if no intermediate payments are made?
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