Calculate the amount of cash payments Jacobs was required to make in each of the two calendar years that were affected by the note payable.

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Q: erly in

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A: As per dual concept of accounting, every transaction has dual impact on the books of accounts.The…

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A:

Q: Required: (a) Calculate the present value of the note (PV).

A: The present value of the note is as follows. =Amount repaid(1+interest rate)=$10000(1+12%)= $ 8,929

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A: Amount in the saving account increases with time because with time interest goes on increasing.

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Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.