The Continental Bank made a loan of $26,000.00 on March 26 to Dr. Hirsch to purchase equipment for her office. The loan was secured by a demand loan subject to a variable rate of interest that was 6% on March 26. The rate of interest was raised to 6.6% effective July 1 and to 7% effective September 1. Dr. Hirsch made partial payments on the loan as follows: $900 on May 5; $800 on June 30; and $400 on October 19. Each payment is first applied to any accumulated interest. Any remainder is then used to reduce the outstanding principal. The terms of the note require payment on October 31 of any interest not paid off by partial payments. How much must Dr. Hirsch pay on October 31? Dr. Hirsch must pay $------ on October 31.

The Continental Bank made a loan of $26,000.00 on March 26 to Dr. Hirsch to purchase equipment for her office. The loan was secured by a demand loan subject to a variable rate of interest that was 6% on March 26. The rate of interest was raised to 6.6% effective July 1 and to 7% effective September 1. Dr. Hirsch made partial payments on the loan as follows: $900 on May 5; $800 on June 30; and $400 on October 19. Each payment is first applied to any accumulated interest. Any remainder is then used to reduce the outstanding principal. The terms of the note require payment on October 31 of any interest not paid off by partial payments. How much must Dr. Hirsch pay on October 31? Dr. Hirsch must pay $------ on October 31.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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