Question

Sylvia borrows $10,500 on August 25 and promises to make three equal payments, one on October 15, one on December 10, and one on February 28. If money is worth 9.75% simple interest, what is the size of the equal payments? Use August 25 as the focal date

Answer 1

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AS FOR GIVEN DATA..

Sylvia borrows $10,500 on August 25 and promises to make three equal payments, one on October 15, one on December 10, and one on February 28. If money is worth 9.75% simple interest, what is the size of the equal payments? Use August 25 as the focal date

EXPLANATION ::-

Focal date	25-08-19	X
last payment date	28-02-20	Y
Simple interest rate	9.75%	R
Duration (days)	187	T=Y-X (days)
Principal	10500	P
Solution
Interest	524.4966	(PTR/100) (note T here is 187/365
Total amount to be paid	11024.5	(principal+interest)
Equated monthly installments	3674.832	11024.5/3

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