Question
The principal plus interest at 6% compounded quarterly on a $15,000 loan made 2 1/2 years ago is due in two years. The debtor is
The principal plus interest at 6% compounded quarterly on a $15,000 loan made 2 1/2 years ago is due in two years. The debtor is proposing to settle the debt by a payment of $5000 today and a second payment in one year that will place the lender in an equivalent financial position, given that money can now earn only 4% compounded semiannually.
a.What should be the amount of the second payment?
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Managerial Accounting
Authors: Wendy M. Tietz, Louis Beaubien, Karen W. Braun
3rd Canadian edition
134460826, 134460820, 9780134524818 , 978-0134526270
