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
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-> 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
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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).
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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).
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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
