Lily was supposed to pay Andy $6700 6 months ago and $2140 in 5 months. Instead, she wants to repay these amounts with a payment of $3100 today and the balance in 3 months. Calculate the balance if the simple interest rate is 5.7% p.a. and the agreed focal date is 3 months from now.

Question

Lily was supposed to pay Andy $6700 6 months ago and $2140 in 5 months.  Instead, she wants to repay these amounts with a payment of $3100 today and the balance in 3 months. Calculate the balance if the simple interest rate is 5.7% p.a. and the agreed focal date is 3 months from now.

tkhunny · Answer

Well, we need all the values to add up in 3 months.

6700 needs to move forward 9 months.
2140 needs to move back 2 months. <== How do you do THAT?!
3100 needs to move forward 3 months.
The final payment is in just the right place already.

anonymous · Answer

is this right? 
$6700(1+0.057x9/12)+$2140(1+0.057x2/12)^-1=$3100(1+0.057x3/12)+x
x=6986.425+2119.86-3144.175
x=5962.11

dumbcow · Answer

yes i believe you are correct :)

tkhunny · Answer

Seriously, why did you doubt?  Good work.

anonymous · Answer

Thank you. I'm doubting myself cause I wasn't sure if I am right or wrong.Cause teacher didn't really teach us about it.

tkhunny · Answer

Maybe a little more confidence today, than yesterday?  :-)