Robert Carre financed his office furniture through the furniture dealer fromwhich he bought it. The dealer's terms allowed him to defer payments (withinterest being charged) for six months and then to make 36 equal end-of-month payments thereafter. The original note was for $12,000 with interest at 12% compounded monthly. After 26 monthly payments, Robert found himself in a financial bind and went to a loan company for assistance. The loan company offered to pay his debts in one lump sum, provided that he will pay the company $204 per month for the next 30 months.(a) Determine the original monthly payment made to the furniture store.(b) Determine the lump-sum payoff amount the loan company will make.(c) What monthly rate of interest is the loan company charging on this loan?
Robert Carre financed his office furniture through the furniture dealer from
which he bought it. The dealer's terms allowed him to defer payments (with
interest being charged) for six months and then to make 36 equal end-of-month payments thereafter. The original note was for $12,000 with interest at 12% compounded monthly. After 26 monthly payments, Robert found himself in a financial bind and went to a loan company for assistance. The loan company offered to pay his debts in one lump sum, provided that he will pay the company $204 per month for the next 30 months.
(a) Determine the original monthly payment made to the furniture store.
(b) Determine the lump-sum payoff amount the loan company will make.
(c) What monthly rate of interest is the loan company charging on this loan?
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 8 images
