document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1196015>Question 1196015</A>: <I><SPAN STYLE=\"word-break: break-all;\"> Three years ago Malcolm borrowed R7500 from Sarah on condition that he would repay her back in five years time. Interest is calculated at 13,5% every Three months.Nine months ago he also borrowed R2500 from her at an interest of 15,7% per year compounded monthly payable in two years from now. What will be the total amount that Malcolm owes Sarah two years from now? </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #828690 by </B><A HREF=/tutors/aboutme.mpl?userid=Theo><B>Theo(13342)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=Theo><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/cgi-bin/show-face.mpl?user=Theo><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=828690\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> looks like two separate accounts need to be set up.<BR>\n" );
document.write( "one of them is at 13.5% per year compounded quarterly (every 3 months).<BR>\n" );
document.write( "the other is at 17.5% per year compounded monthly.<BR>\n" );
document.write( "for the first account, 7500 was borrowed 3 years ago and is due 2 years from now.<BR>\n" );
document.write( "that's a total of 5 years * 4 = 20 quarters.<BR>\n" );
document.write( "the formula to use is f = p * (1+r) ^ n<BR>\n" );
document.write( "for the first loan, p = 7500, (1+r) = (1+.135/4) = 1.03375, n = 5 * 4 = 20<BR>\n" );
document.write( "that's an interest rate of .03375 per quarter for 20 quarters.<BR>\n" );
document.write( "the formula becomes f = 7500 * 1.03375 ^ 20 = 14567.05348.<BR>\n" );
document.write( "for the second loan, p = 2500, (1+r) = (1+.157/12) = 1.013083333, n = 9 + 2*12 = 33.<BR>\n" );
document.write( "that's an interest rate of .013083333 per month for 33 months.<BR>\n" );
document.write( "the formula becomes f = 2500 * 1.013083333 ^ 33 = 3839.110744.<BR>\n" );
document.write( "the total owed 2 years from now is 14567.05348 + 3839.110744 = 18406.16422.<BR>\n" );
document.write( "round to the nearest penny to get 18406.16.<BR>\n" );
document.write( "your monthly timeline is as follows:<BR>\n" );
document.write( "a loan of 7500 3 years ago.<BR>\n" );
document.write( "a loan of 2500 9 months ago.<BR>\n" );
document.write( "a total of 18406.16 due 2 years from now.<BR>\n" );
document.write( "let me know if you have any questions.<BR>\n" );
document.write( "theo </SPAN>\n" );
document.write( "</TD></TR></TABLE>\n" );