Determine original monthly payment made to furniture store

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Question: A new company financed their office furniture through the furniture dealer from which he bought it. The dealer's terms allowed the company to defer payments (including interest) 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. The new company owners find the company in a financial bind and went to a loan company for assistance. The loan company offered to pay the debts in one lump sum provided that they will get paid $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?

Reference no: EM132013830

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