Jeffery currently owes $8,000 to a friend who is charging him interest of 2.80% p.m. He...
Homework Answers
Let 'X' be the payment today.
Then payment after 7 months = ( 8000 - X )( 1+ 0.028 )^7
= ( 8000- X ) 1.2133
Since payment now and payment after seven months are equal, which means
X = ( 8000 - X ) 1.2133
X = 9706.4 - 1.2133X
2.2133 X = 9706.4
X= 9706.4 / 2.2133 = 4385.49
Therefore Jeffery has to pay $ 4385.49 today and after 7 months
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