The purchaser of a car paid $10,000 cash and agreed to pay $3000 at the end of 6 months for 10 years. He failed to make the first 5 payments of $3000 each. At the end of 3 years, he desires to pay the car by a single payment which will cancel both his accumulated liabilities and his future liabilities. What must he pay if money is worth 6% per annum compounded semi-annually?
The purchaser of a car paid $10,000 cash and agreed to pay $3000 at the end of 6 months for 10 years. He failed to make the first 5 payments of $3000 each. At the end of 3 years, he desires to pay the car by a single payment which will cancel both his accumulated liabilities and his future liabilities. What must he pay if money is worth 6% per annum compounded semi-annually?
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter9: Current Liabilities, Contingencies, And The Time Value Of Money
Section: Chapter Questions
Problem 9.19E
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The purchaser of a car paid $10,000 cash and agreed to pay $3000 at the end of 6 months for 10 years. He failed to make the first 5 payments of $3000 each. At the end of 3 years, he desires to pay the car by a single payment which will cancel both his accumulated liabilities and his future liabilities. What must he pay if money is worth 6% per annum compounded semi-annually?
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