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 distance covered by a car traveling at a speed of 60 mph for 3 hours?
+
What is the length of the median from vertex A in a triangle ABC with side lengths of 7 cm, 10 cm, and 12 cm?
+
What is one of the characteristics of the ellipse function when the sum of the squares of the focal radii is greater than the square of the major axis length?
+
New questions in Mathematics
A drawer contains three pairs of white socks, five pairs of black socks and two pairs of red socks. Caden randomly selects two pairs of socks on his way to the gym. What is the probability that both pairs of socks are black?
58+861-87
(m²-121)
6. Among 100 of products there are 20 rejects. We will randomly select 10 of products. The random variable X indicates the number of rejects among the selected products. Determine its distribution.
We have spent 1/4 of the inheritance on taxes and 3/5 of the rest on buying a house. If the inheritance was a total of €150,000 How much money do we have left?
If the midpoint of point A on the x=3 line and point B on the y=-2 line is C(-2,0), what is the sum of the ordinate of point A and the abscissa of point B?
You are the newly appointed transport manager for Super Trucking (Pty) Ltd, which operates as a logistics service provider for various industries throughout southern Africa. One of these vehicles is a 4x2 Rigid Truck and drawbar trailer that covers 48,000 km per year. Use the assumptions below to answer the following questions (show all calculations): Overheads R 176,200 Cost of capital (% of purchase price per annum) 11.25% Annual License Fees—Truck R 16,100 Driver Monthly cost R 18,700 Assistant Monthly cost R 10,500 Purchase price: - Truck R 1,130,000 Depreciation: straight line method Truck residual value 25% Truck economic life (years) 5 Purchase price: Trailer R 370,000 Tyre usage and cost (c/km) 127 Trailer residual value 0% Trailer economic life (years) 10 Annual License Fees—Trailer R 7,700 Fuel consumption (liters/100km) 22 Fuel price (c/liter) 2053 Insurance (% of cost price) 7.5% Maintenance cost (c/km) 105 Distance travelled per year (km) 48000 Truck (tyres) 6 Trailer (tyres) 8 New tyre price (each) R 13,400 Lubricants (% of fuel cost) 2.5% Working weeks 50 Working days 5 days / week Profit margin 25% VAT 15% Q1. Calculate the annual total vehicle costs (TVC)
The function h(t)=-5t^2+20t+60 models the height in meters of a ball t seconds after it’s thrown . Which describe the intercepts and vertex of this function
Let v be the set of all ordered pairs of real numbers and consider the scalar addition and multiplication operations defined by: u+v=(x,y)+(s,t)=(x+s+1,y+t -two) au=a.(x,y)=(ax+a-1,ay-2a+2) It is known that this set with the operations defined above is a vector space. A) calculate u+v is au for u=(-2,3),v=(1,-2) and a=2 B) show that (0,0) #0 Suggestion find a vector W such that u+w=u C) who is the vector -u D) show that axiom A4 holds:-u+u=0
9.25=2pi r solve for r
A Smooth Plane is listed for $195.00. Discounts of 12% and 10% are allowed. If the customer pays cash within 30 days, an additional discount of 3% is granted. What is the cost if a carpenter takes advantage of all the discounts offered?
3%2B2
Let x be an integer. Prove that x^2 is even if and only if is divisible by 4.
1. A jeweler has two gold bars, with 80% purity and the other with 95% purity. How much of each must be melted to obtain a 5 kilo ingot with 86% purity?
P 13. Let P a point inside of a square ABCD. Show that the perpendicular lines drawn from A, B, C, respectively D, to BP, CP, DP, respectively AP are concurrent. Use geometric rotation.
Square root of 169 with steps
A membership to the gym cost $25 per person in 1995. The membership cost has increased by an average $6 per person for each year since 1995. Write a linear equation for the cost of a gym membership for one person since 1995. What is the cost of a gym membership in 2009?
What is the set-off agreement? Make your own example, describe and put in T accounts how you record transactions.
If the area of a circle is 75.7ft2, what is the radius? Give the answer in metres. Round answer to 2 decimal places and enter the units.
(3.1x10^3g^2)/(4.56x10^2g)