Mrs.Singh owes Mr.Valdy $55,513.78 in 14-months.Mr.Valdy agrees to let her repay the loan with a payment of $35,000 in 6-months,$10,000 in 8-months and $X in 14-months.If money is worth j₄ = 6%,what is the value of X,using 14-months as the focal date along with the exact method of crediting/charging interest? A)$8793.97 B)$9204.40 C)$9230.06 D)$9794.03

Question

Quizplus · Accepted Answer

The correct answer is A because the present value of the payments must equal the present value of the loan. The present value of the payments is $35,000/(1 + 0.06/2)^6 + $10,000/(1 + 0.06/2)^8 + $X/(1 + 0.06/2)^14 = $55,513.78. Solving for X gives X = $8793.97.

MrsSingh Owes Mr