At the Final duedate value ,which is 12 months; Total obligation=Total payments ( i.e. part payments + final payment[X]) This way we find what Lisa owes Tracy at the end of 12 months 7760 = 3480+X ⇒ X=7760-3480 ⇒ ⇒X=$4280 Lisa owes $4 280. Practice Questions Noma owes 8 500 due in 10 months. For each of the following cases, what single payment will repay her debt if money is worth 15% simple interest per annum? a) now b) six months from now c) in one year LK owes AT $20 000 due in six months and $6 000 due in 11 months. LK offers to pay $10 000 immediately if he can pay the balance in two year. AT agrees, on condition that they use a simple interest rate of 18% per annum. They also agree that for settlement purposes the $10 000 paid now will also be subject to the same rate. How much will LK have to pay at the end of the two years? (Take the comparison date as one year from now!) Mufaro must pay the bank $2 000 which is due in one year. She is anxious to lessen her burden in advance and therefore pays $600 after three months, and another $800 four months later. If the bank agrees that both payments are subject to the same simple interest rate as the loan,
At the Final duedate value ,which is 12 months; Total obligation=Total payments ( i.e. part payments + final payment[X]) This way we find what Lisa owes Tracy at the end of 12 months ⇒ 7760 = 3480+X ⇒ X=7760-3480 ⇒X=$4280 Lisa owes $4 280. Practice Questions Noma owes 8 500 due in 10 months. For each of the following cases, what single payment will repay her debt if money is worth 15% simple interest per annum? a) now b) six months from now c) in one year LK owes AT $20 000 due in six months and $6 000 due in 11 months. LK offers to pay $10 000 immediately if he can pay the balance in two year. AT agrees, on condition that they use a simple interest rate of 18% per annum. They also agree that for settlement purposes the $10 000 paid now will also be subject to the same rate. How much will LK have to pay at the end of the two years? (Take the comparison date as one year from now!) Mufaro must pay the bank $2 000 which is due in one year. She is anxious to lessen her burden in advance and therefore pays $600 after three months, and another $800 four months later. If the bank agrees that both payments are subject to the same simple interest rate as the loan,
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