document.write( "Question 1173636: Kathleen has a $610 loan payment due in eight months. What amount of money should she be able to pay today if the interest on her loan is 3.75% per annum?\r
\n" ); document.write( "\n" ); document.write( "Equivalent amount =?\r
\n" ); document.write( "\n" ); document.write( " \n" ); document.write( "
Algebra.Com's Answer #850729 by CPhill(1959)\"\" \"About 
You can put this solution on YOUR website!
To find the equivalent amount Kathleen should pay today, we need to calculate the present value of her future loan payment. Here's how:\r
\n" ); document.write( "\n" ); document.write( "**Understanding the Concepts**\r
\n" ); document.write( "\n" ); document.write( "* **Future Value (FV):** $610 (the amount due in 8 months)
\n" ); document.write( "* **Annual Interest Rate (r):** 3.75% or 0.0375
\n" ); document.write( "* **Time (t):** 8 months, which is 8/12 of a year
\n" ); document.write( "* **Present Value (PV):** The amount to pay today\r
\n" ); document.write( "\n" ); document.write( "**Calculations**\r
\n" ); document.write( "\n" ); document.write( "Since this is simple interest, we can use the following formula:\r
\n" ); document.write( "\n" ); document.write( "* PV = FV / (1 + rt)\r
\n" ); document.write( "\n" ); document.write( "Let's plug in the values:\r
\n" ); document.write( "\n" ); document.write( "* PV = $610 / (1 + (0.0375 * (8/12)))
\n" ); document.write( "* PV = $610 / (1 + (0.0375 * 0.666667))
\n" ); document.write( "* PV = $610 / (1 + 0.025)
\n" ); document.write( "* PV = $610 / 1.025
\n" ); document.write( "* PV ≈ $595.12\r
\n" ); document.write( "\n" ); document.write( "**Answer**\r
\n" ); document.write( "\n" ); document.write( "Kathleen should be able to pay approximately $595.12 today.
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