The Continental Bank made a loan of $20,000 on March 25 to Dr. Hirsch to purchase equipment for her office. The loan was secured by a demand loan (note?) subject to a variable rate of interest that was 7% on March 25. The rate of interest was raised to 8.5% effective July 1 and to 9.5% effective September 1. Dr. Hirsch made partial payments on the loan as follows: $600 on May 5; $800 on June 30; and $400 on October 10. The terms of the note require payment of any accrued interest up to, and including, October 31. How much must Dr. Hirsch pay on October 31? (Use the Declining Balance Method) May 5 Payment Calculate the interest accrued to May 5. Calculate the amount of the payment that can be applied to the principal. Calculate the remaining principal.
The Continental Bank made a loan of $20,000 on March 25 to Dr. Hirsch to purchase equipment for her office. The loan was secured by a demand loan (note?) subject to a variable rate of interest that was 7% on March 25. The rate of interest was raised to 8.5% effective July 1 and to 9.5% effective September 1. Dr. Hirsch made partial payments on the loan as follows: $600 on May 5; $800 on June 30; and $400 on October 10. The terms of the note require payment of any accrued interest up to, and including, October 31. How much must Dr. Hirsch pay on October 31? (Use the Declining Balance Method) May 5 Payment Calculate the interest accrued to May 5. Calculate the amount of the payment that can be applied to the principal. Calculate the remaining principal.
Chapter12: Current Liabilities
Section: Chapter Questions
Problem 11EB: Whole Leaves wants to upgrade their equipment, and on January 24 the company takes out a loan from...
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