Help

Save & Exit

Submit

Suppose Arnie sells $2,000$ golf balls to Jack on credit. Jack agrees to pay Arnie $$1,000$ plus $6$ percent interest on the principal still owed per month for a period of $24$ months. After two months, Jack's cash flow is impaired by an unexpected downturn in his business. Arnie and Jack then agree to modify the contract to allow Jack to pay a smaller monthly payment $($ $$500$ per month$),$ but at the same interest rate until the balance is paid off in full. Later, Arnie runs into cash flow problems of his own and demands that Jack honor the original credit contract terms. Which of the following is true regarding the rights and liabilities of Arnie and Jack?