In order to finance a new product line, a company that makes high-temperature ball bearings borrowed $1.8 million at 10% per year compound interest. If the company repaid the loan in a lump sum amount after 2 years, what was (a) the amount of the payment, and (b) the amount and percentage of interest based on the original principal?

In order to finance a new product line, a company that makes high-temperature ball bearings borrowed $1.8 million at 10% per year compound interest. If the company repaid the loan in a lump sum amount after 2 years, what was (a) the amount of the payment, and (b) the amount and percentage of interest based on the original principal?

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter9: Current Liabilities, Contingencies, And The Time Value Of Money

Section: Chapter Questions

Problem 9.21MCE

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