Margaret has $3,200 cash after selling off her television, sound system, and personal computer. She has debts of $4,800 owing to the following creditors: Anna - $900
Bob's Shop - $1500
Hyatt's - $2100
Jones - $300
If they all agree to a composition, how much will Hyatt's be able to collect?

Question

Quizplus · Accepted Answer

In a composition, creditors agree to accept a reduced amount. Margaret has $3,200 to pay off $4,800 in debts, so each creditor will receive 2/3 of what they are owed. Hyatt's is owed $2,100, so they will collect $2,100 * (2/3) = $1,400.

Margaret Has $3,200 Cash After Selling Off Her Television, Sound