Compounding interest on the declining balance
Dr. Jones decides that on December 31st he is going to purchase new building at $225,000. He agrees to put 20% down and make 18 equal annual installments that are to include the principle plus 15% compounding interest on the declining balance.
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Jake Marley is negotiating with the bank for a $200,000, 90-day 12% loan effective July 1 of the current year. If the bank grants the loan, the proceeds will be $194,000, which Marley intends to use on July 1 as follows:
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Dr. Jones decides that on December 31st he is going to purchase new building at $225,000. He agrees to put 20% down and make 18 equal annual installments that are to include the principle plus 15%
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If we rely on the likelihood principle and that principle was false, would our perception then be false, also?
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