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A successful businessman is selling one of his fast food franchises to a close friend. He is selling the business today for $2,973,400.00. However, his friend is short on capital and would like to delay payment on the business. After negotiation, they agree to delay 4.00 years before the first payment. At that point, the friend will make quarterly payments for 15.00 years. The deal calls for a 8.40% APR "loan" rate with quarterly compounding. What quarterly payment will the friend make on the loan?

A successful businessman is selling one of his fast food franchises to a close friend. He is selling the business today for $2,973,400.00. However, his friend is short on capital and would like to delay payment on the business. After negotiation, they agree to delay 4.00 years before the first payment. At that point, the friend will make quarterly payments for 15.00 years. The deal calls for a 8.40% APR "loan" rate with quarterly compounding. What quarterly payment will the friend make on the loan?

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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A successful businessman is selling one of his fast food franchises to a close friend. He is selling the business today for $2,973,400.00. However, his friend is short on capital and would like to delay payment on the business, After negotiation, they agree to delay 4.00 years before the first payment. At that point, the friend will make quarterly payments for 15.00 years. The deal calls for a 8.40% APR "loan rate with quarterly compounding. What quarterly payment will the friend make on the loan? Submit Answer format: Currency: Round to: 2 decimal places.
Transcribed Image Text:A successful businessman is selling one of his fast food franchises to a close friend. He is selling the business today for $2,973,400.00. However, his friend is short on capital and would like to delay payment on the business, After negotiation, they agree to delay 4.00 years before the first payment. At that point, the friend will make quarterly payments for 15.00 years. The deal calls for a 8.40% APR "loan rate with quarterly compounding. What quarterly payment will the friend make on the loan? Submit Answer format: Currency: Round to: 2 decimal places.
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