SOLUTION: Payments of $5,000 due in 3 months and $6,000 due in 9 months are to be paid off with interest allowed at 13%. How much would be required to pay off the loan today?( Use today as t

Question 1166215: Payments of $5,000 due in 3 months and $6,000 due in 9 months are to be paid off with interest allowed at 13%. How much would be required to pay off the loan today?( Use today as the focal date).

Answer by ikleyn(52778) (Show Source): You can put this solution on YOUR website!
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Payments of $5,000 due in 3 months and $6,000 due in 9 months are to be paid off with interest allowed at 13%.
How much would be required to pay off the loan today?( Use today as the focal date).
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Since the problem tells nothing about compounding, I will assume that 13% is simple annual interest rate.


To answer the question, we should add the present values of the two accounts.


Present value of the first  account is   = 4842.62 dollars (rounded).

Present value of the second account is   = 5466.97 dollars (rounded).


The total to pay today is the sum  4842.62 + 5466.97 = 10309.59 dollars.    ANSWER

Solved.

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