Compute the interest that will be paid

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Problem - Serial Installments; Amounts Applicable to Interest and Principal - Ronald McDuffie purchases a new car at a cost of $14,400. He pays $3,000 down and issues an installment note payable by which he promises to pay the balance in 18 equal monthly installments, which include interest at an annual rate of 18% on the remaining unpaid balance at the beginning of each month starting with the first month after the purchase.

Required -

1. Compute the equal installment payments.

2. Compute the interest that will be paid for each of the first two periods. Indicate the amount of each payment that will be a reduction of principal.

Reference no: EM132882953

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