Exercise 9Nesrin, purchased a new car for $9,420, paying $3,000 down payment and agreeing to 12monthly payments (by notes) of a face value of $600 each, beginning one month after thepurchase.a- Calculate the credit rate.b- Nesrin suggested to pay $3000 the day of purchase and substituting the 12 noteswith a unique note of $7200. Determine the due date of that note with the sameconditions as above.c- At last, she decided to pay $4680 down payment and agreeing to pay theremaining amount by 3 payments every 4 months. The payments would begin 4months from the time of purchase. The payment amount will increase by ageometrical sequence of common ration q = 2.If the credit discount rate is 12%, calculate the maturity value Vi of eachpayment.

Credit rate: The amount charged for a credit loan or purchase is usually represented as a…

Nesrin, purchased a new car for $9,420, paying $3,000 down payment and agreeing to 12 monthly payments (by notes) of a face value of $600 each, beginning one month after the purchase. a- Calculate the credit rate.

Nesrin, purchased a new car for $9,420, paying $3,000 down payment and agreeing to 12 monthly payments (by notes) of a face value of $600 each, beginning one month after the purchase. a- Calculate the credit rate.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter12: Current Liabilities

Section: Chapter Questions

Problem 12EA: Scrimiger Paints wants to upgrade its machinery and on September 20 takes out a loan from the bank...

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Question

Exercise 9
Nesrin, purchased a new car for $9,420, paying $3,000 down payment and agreeing to 12
monthly payments (by notes) of a face value of $600 each, beginning one month after the
purchase.
a- Calculate the credit rate.
b- Nesrin suggested to pay $3000 the day of purchase and substituting the 12 notes
with a unique note of $7200. Determine the due date of that note with the same
conditions as above.
c- At last, she decided to pay $4680 down payment and agreeing to pay the
remaining amount by 3 payments every 4 months. The payments would begin 4
months from the time of purchase. The payment amount will increase by a
geometrical sequence of common ration q = 2.
If the credit discount rate is 12%, calculate the maturity value Vi of each
payment.

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