Company A sells a machine to Company B on September 1 for $27,000. The down payment to be paid by Company B is $3,000. Company B must pay monthly minimum payments of $265. 12% interest rate per annum on the unpaid balance is deducted from each payment and the balance is applied to reduce the principal outstanding. Company B makes the following payments to Company A: October 1 November 1 December 1 January 2 500 $ $ 500 $1,000 $ 500 Prepare a partial amortization schedule in order to answer the following question. In preparing an amortization schedule, what is the balance at the end of December?
Company A sells a machine to Company B on September 1 for $27,000. The down payment to be paid by Company B is $3,000. Company B must pay monthly minimum payments of $265. 12% interest rate per annum on the unpaid balance is deducted from each payment and the balance is applied to reduce the principal outstanding. Company B makes the following payments to Company A: October 1 November 1 December 1 January 2 500 $ $ 500 $1,000 $ 500 Prepare a partial amortization schedule in order to answer the following question. In preparing an amortization schedule, what is the balance at the end of December?
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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$22720, $22712, $23480, $23740, None of the other alternatives are correct
Transcribed Image Text:Company A sells a machine to Company B on September 1 for $27,000. The down payment to be paid by Company B is $3,000. Company B must pay
monthly minimum payments of $265. 12% interest rate per annum on the unpaid balance is deducted from each payment and the balance is applied to
reduce the principal outstanding.
Company B makes the following payments to Company A:
October 1
November 1
December 1
January 2
$ 500
500
$1,000
$ 500
Prepare a partial amortization schedule in order to answer the following question.
In preparing an amortization schedule, what is the balance at the end of December?
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