Erica borrowed money from Charles an amount of 58,744 and promise to pay at the end of second and fourth year at a simple interest rate of 15.198%. The second payment is 30% more than the first one. How much is the first payment? How much is the second payment?

Erica borrowed money from Charles an amount of 58,744 and promise to pay at the end of second and fourth year at a simple interest rate of 15.198%. The second payment is 30% more than the first one. How much is the first payment? How much is the second payment?

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 25PROB

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Concept explainers

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.

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