A loan of $10,000 is taken out on October 29,2010 and is to be paid off with 2 equal installments of X,to be paid on November 18 and December 29.What is the value of X if r = 7% and the Merchant's rule is used?
A)$5038.68
B)$5057.21
C)$5102.45
D)$5171.99

Question

Quizplus · Accepted Answer

The correct answer is A because the Merchant's rule is used to calculate the present value of the two equal installments, which is then used to find the value of X.

A Loan of $10,000 Is Taken Out on October 29,2010