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
87 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 quadratic formula and how can it be used to solve equations?
+
Question: What is the maximum value that the function f(x) = 2x^3 - 9x^2 + 12x - 5 achieves on the interval [0, 4]?
+
What is the value of x in the logarithmic function y = log(3x+4) when y = 2?
+
New questions in Mathematics
Convert the following function from standard form to vertex form f(x) = x^2 + 7x - 1
Solve: −3(−2x+23)+12=6(−4x+9)+9.
the value of sin 178°58'
What is the amount of interest of 75,000 at 3.45% per year, at the end of 12 years and 6 months?
I need .23 turned into a fraction
Consider numbers from 1 to 2023. We delete 3 consecutive numbers so, that the avarage of the left numbers is a whole number
The bus one way of the road which is 10km is heading with speed of 20km/h ,then the bus the other 10km is heading with speed of 60km/h. The middle speed of the road is it equal with arithmetic speed of the v1 and v2 ?
The beta of a company is 1.51 while its financial leverage is 27%. What is then its unlevered beta if the corporate tax rate is 40%? (4 decimal places)
Perpetual annuities are a series of payments whose duration has no end. Explain how can we calculate them, if they have no end?
What is the appropriate measurement for the weight of an African elephant?
Suppose you have a sample of 100 values from a population with mean mu = 500 and standard deviation sigma = 80. Given that P(z < −1.25) = 0.10565 and P(z < 1.25) = 0.89435, the probability that the sample mean is in the interval (490, 510) is: A)78.87% B)89.44% C)10.57% D)68.27%
sin 30
In a laboratory test, it was found that a certain culture of bacteria develops in a favorable environment, doubling its population every 2 hours. The test started with a population of 100 bacteria. After six hours, it is estimated that the number of bacteria will be:
Congratulations, you have saved well and are ready to begin your retirement. If you have $1,750,000.00 saved for your retirement and want it to last for 40 years, and will earn 10.8% compounded monthly: What is the amount of the monthly distribuion? 216.50 How much interest is earned in retirement?
Let x be an integer. Prove that x^2 is even if and only if is divisible by 4.
16.What payment (deposit) made at the end of each month will accumulate to $10473 in 13 years at 7.9% compounded monthly? Enter to the nearest cent (two decimals). Do not use $ signs or commas in the answer.
A multiple choice exam is made up of 10 questions; Each question has 5 options and only one of them is correct. If a person answers at random, what is the probability of answering only 3 good questions?
The mass of 120 molecules of X2C4 is 9127.2 amu. Identify the unknown atom, X, by finding the atomic mass. The atomic mass of C is 12.01 amu/atom
X^X =49 X=?
Find the set of points formed by the expression 𝜋<|𝑧−4+2𝑖|<3𝜋.