Question

To pay off a debt we must repay a capital of 5000 euros today, a capital of 5000 euros in 3 years and a capital of 5000 euros in 9 years. We agree to pay off the debt in a single installment in 6 years; How much will we have to pay if the annual compound rate is 4.25%?

148

likes
741 views

Answer to a math question To pay off a debt we must repay a capital of 5000 euros today, a capital of 5000 euros in 3 years and a capital of 5000 euros in 9 years. We agree to pay off the debt in a single installment in 6 years; How much will we have to pay if the annual compound rate is 4.25%?

Expert avatar
Nash
4.9
84 Answers
To find out how much we need to pay after 6 years with an annual compound rate of 4.25%, we need to calculate the future value of each payment and then add them up.

Step 1: Calculate the future value of €5000 paid in 6 years:
Future Value = Present Value * (1 + Rate)^N
Future Value = €5000 * (1 + 0.0425)^6

Step 2: Calculate the future value of €5000 paid in 3 years:
Future Value = €5000 * (1 + 0.0425)^3

Step 3: Calculate the future value of €5000 paid in 9 years:
Future Value = €5000 * (1 + 0.0425)^9

Step 4: Add up all future values to find the total amount to be paid:
Total = Future Value1 + Future Value2 + Future Value3

Now, let's calculate the total amount to be paid:

1. Future Value_1 = €5000 * (1 + 0.0425)^6

Future Value_1 = €5000 * (1.0425)^6 ≈ €5000 * 1.2882 = €6441

2. Future Value_2 = €5000 * (1 + 0.0425)^3

Future Value_2 = €5000 * (1.0425)^3 ≈ €5000 * 1.1301 = €5650.50

3. Future Value_3 = €5000 * (1 + 0.0425)^9

Future Value_3 = €5000 * (1.0425)^9 ≈ €5000 * 1.4350 = €7175

4. Total = Future Value_1 + Future Value_2 + Future Value_3

Total ≈ €6441 + €5650.50 + €7175 = €19266.50

Therefore, you will need to pay approximately €19266.50 after 6 years with an annual compound rate of 4.25%.

\boxed{Answer: €19266.50} - Total amount to be paid.

Frequently asked questions (FAQs)
What is the integral of ∫ (x^2 + 3x + 2) dx?
+
Find the roots of the equation x^3 + 4x^2 - 3x - 18 = 0.
+
Math question: What is the area (in square units) enclosed by the graph of the quadratic equation y = x^2 - 4, between x = -3 and x = 3?
+
New questions in Mathematics
The patient is prescribed a course of 30 tablets. The tablets are prescribed “1 tablet twice a day”. How many days does a course of medication last?
5(4x+3)=75
The data set (75, 85, 58, 72, 70, 75) is a random sample from the normal distribution No(µ, σ). Determine a 95% two-sided confidence interval for the mean µ .
2x-4y=-6; -4y+4y=-8
The miles per gallon (mpg) for each of 20 medium-sized cars selected from a production line during the month of March are listed below. 23.0 21.2 23.5 23.6 20.1 24.3 25.2 26.9 24.6 22.6 26.1 23.1 25.8 24.6 24.3 24.1 24.8 22.1 22.8 24.5 (a) Find the z-scores for the largest measurement. (Round your answers to two decimal places.) z =
-0.15/32.6
-3(-4x+5)=-6(7x-8)+9-10x
Substitute a=2 and b=-3 and c=-4 to evaluate 2ac/(-2b^2-a)
Solve the following equation for x in exact form and then find the value to the nearest hundredths (make sure to show your work): 5e3x – 3 = 25
Express the trigonometric form of the complex z = -1 + i.
For what values of m is point P (m, 1 - 2m) in the 2⁰ quadrant?
36 cars of the same model that were sold in a dealership, and the number of days that each one remained in the dealership yard before being sold is determined. The sample average is 9.75 days, with a sample standard deviation of 2, 39 days. Construct a 95% confidence interval for the population mean number of days that a car remains on the dealership's forecourt
Find the area of a triangle ABC when m<C = 14 degrees, a = 5.7 miles, and b = 9.3 miles.
A salesperson earns a base salary of $600 per month plus a commission of 10% of the sales she makes. You discover that on average, it takes you an hour and a half to make $100 worth of sales. How many hours will you have to work on average each month for your income to be $2000?
Find I (Intrest) using simple interest formula of 17700 @ 15% for 4 years
if y=1/w^2 yw=2-x; find dy/dx
2+2020202
Solve the following 9x - 9 - 6x = 5 + 8x - 9
answer this math question The scale on a map is drawn so that 5.5 inches corresponds to an actual distance of 225 miles. If two cities are 12.75 inches apart on the map, how many miles apart are they? (Round to the nearest tenth) miles apart. The two cities are how many miles apart
23,456 + 3,451