Robert Carr financed his office furniture through the furniture dealer from which he bought it. The dealers
Question:
Robert Carré financed his office furniture through the furniture dealer from which he bought it. The dealer’s terms allowed him to defer payments (with interest being charged) for six months and then to make 36 equal end‐of‐month payments thereafter. The original note was for $12,000 with interest at 12% compounded monthly. After 26 monthly payments, Robert found himself in a financial bind and went to a loan company for assistance. The loan company offered to pay his debts in one lump sum, provided that he will pay the company $204 per month for the next 30 months.
(a) Determine the original monthly payment made to the furniture store.
(b) Determine the lump‐sum payoff amount the loan company will make.
(c) What monthly rate of interest is the loan company charging on this loan?
A dealer in the securities market is an individual or firm who stands ready and willing to buy a security for its own account (at its bid price) or sell from its own account (at its ask price). A dealer seeks to profit from the spread between the...
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Given i 1 per month deferred period 6 months N 36 monthly paym...View the full answer
