Question

1. Debts of $1480 due four months ago and $1385 due in one month are to be settled by two equal payments due now and nine months from now respectively. Find the size of the equal payments at 12% p.a. with the agreed focal date of now. Round your answer to the nearest cent. 2. $2850, five-month promissory note with interest at 6.15% is issued on June 1. Compute the proceeds of the note on August 13, when money is worth 7.5%. Round your answer to the nearest cent. 3. Debts of $1480 due four months ago and $1385 due in one month are to be settled by two equal payments due now and nine months from now respectively. Find the size of the equal payments at 12% p.a. with the agreed focal date of now. Round your answer to the nearest cent.

          1. Debts of $1480 due four months ago and $1385 due in one month
are to be settled by two equal payments due now and nine months
from now respectively. Find the size of the equal payments at 12%
p.a. with the agreed focal date of now. Round your answer to the
nearest cent.
2. $2850, five-month promissory note with interest at 6.15% is
issued on June 1. Compute the proceeds of the note on August 13,
when money is worth 7.5%. Round your answer to the nearest
cent.
3. Debts of $1480 due four months ago and $1385 due in one month
are to be settled by two equal payments due now and nine months
from now respectively. Find the size of the equal payments at 12%
p.a. with the agreed focal date of now. Round your answer to the
nearest cent.

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Added by Roy G.

Elementary and Intermediate Algebra

Alan S. Tussy, R. David Gustafson 5th Edition

Instant Answer

Solved by Expert Derrick Danso

01/31/2022

Step 1

For the first problem, we need to find the present value of the debts. The present value of the $1480 debt that was due four months ago is $1480 / (1 + 0.12/3)^4 = $1326.68. The present value of the $1385 debt due in one month is $1385 / (1 + 0.12/12) = $1363.64. Show more…

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1. Debts of $1480 due four months ago and $1385 due in one month are to be settled by two equal payments due now and nine months from now respectively. Find the size of the equal payments at 12% p.a. with the agreed focal date of now. Round your answer to the nearest cent. 2. $2850, five-month promissory note with interest at 6.15% is issued on June 1. Compute the proceeds of the note on August 13, when money is worth 7.5%. Round your answer to the nearest cent. 3. Debts of $1480 due four months ago and $1385 due in one month are to be settled by two equal payments due now and nine months from now respectively. Find the size of the equal payments at 12% p.a. with the agreed focal date of now. Round your answer to the nearest cent.

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Transcript

00:01 So here for the first question, we are to find the size of equal payment at 12%.

00:07 And so the formula that we are going to use is given by the present value equals the future value all over 1 plus r all to the power n.

00:16 And the n here is the number of periods.

00:19 Then the r is the interest rate.

00:22 Now you are to find the value of each payment as of today.

00:26 Now, to do that, we have the values.

00:30 148, 1480, multiplied by 1 plus 0 .01 to the power 4 plus 1385 multiplied by 1 plus 0 01, all to the power 4 plus 1385, multiplied by 1 plus 001, all to the power 1.

00:59 And this is equal to x this is equal to x plus x multiplied by 1 multiplied by 1 plus 0 .01 all to the power minus 9 now when you solve this when you solve this you are going to get 1540.

01:37 Plus 1398 .85 equals x plus x multiplied by x multiplied by 0 .914 and when you solve this you are going to get your x to be equal to 1535 0 .50 .15 .50.

02:19 So the size of equal payment, the size of the equal payment is given by this.

02:25 The size of the equal payment is given by 1535.

02:32 Now for the second question, for the second question, we have the legal due date is 4th november.

02:41 So the legal due dates.

02:51 The legal due date is 4th november.

03:00 Fourth november.

03:03 And this is five months...

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