Kevin Finnegan, CPA, has just billed a customer $ 40,000 for services rendered. The customer wants to pay for this bill by making monthly payments over the next three years.
A. Determine the amount of the customer’s monthly payments if Kevin wants a 6 percent annual re-turn on the loan.
B. Determine the amount of the customer’s monthly payments if Kevin wants a 7 percent annual re-turn on the loan.
C. Assume Kevin wants a 6 percent return, but the customer wants to make quarterly payments over the next three years. Determine the amount of the payment that Kevin would find acceptable in this situation.