On January 1, 2019, Charles Jamison borrows $40,000 from his father to open a business. Charles is the beneficiary of a trust created by his aunt from which he will receive $25,000 on January 1, 2029. He signs an agreement to make this amount payable to his father and, further, to pay his father equal annual amounts from January 1, 2020, to January 1, 2028, inclusive, in retirement of the debt. Interest is 12% per year. What are the annual payments?
On January 1, 2019, Charles Jamison borrows $40,000 from his father to open a business. Charles is the beneficiary of a trust created by his aunt from which he will receive $25,000 on January 1, 2029. He signs an agreement to make this amount payable to his father and, further, to pay his father equal annual amounts from January 1, 2020, to January 1, 2028, inclusive, in retirement of the debt. Interest is 12% per year. What are the annual payments?
Chapter3: Income Sources
Section: Chapter Questions
Problem 39P
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Question
Transcribed Image Text:On January 1, 2019, Charles Jamison borrows $40,000 from his father to open a business.
Charles is the beneficiary of a trust created by his aunt from which he will receive $25,000
on January 1, 2029. He signs an agreement to make this amount payable to his father and,
further, to pay his father equal annual amounts from January 1, 2020, to January 1, 2028,
inclusive, in retirement of the debt. Interest is 12% per year. What are the annual
payments?
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