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 limit as x approaches infinity of (3x^2 + 5x) / (2x^2 - x + 1)?
+
Find the equation of a circle centered at (2,-3) with a radius of 5.
+
What is the value of log(base 4)11 plus log(base 5)9?
+
New questions in Mathematics
5 squirrels were found to have an average weight of 9.3 ounces with a sample standard deviation is 1.1. Find the 95% confidence interval of the true mean weight
Since one of the three integers whose product is (-60) is (+4), write the values that two integers can take.
(x^2+3x)/(x^2-9)=
Jose bought 3/4 of oil and his sister bought 6/8, which of the two bought more oil?
What payment 7 months from now would be equivalent in value to a $3,300 payment due 23 months from now? The value of money is 2.7% simple interest. Round your answer to 2 decimal places. Show all work and how you arrive at the answer..
X^2 = 25
A bird randomly chooses to land on 1 of 12 perches available in its aviary. Determine the Probability of it landing on a perch numbered 8 and then on a perch marked with a prime number; take into account that he never lands on the same perch in the sequence.
2x-4y=-6; -4y+4y=-8
Sean must chose a 6- digit PIN number for his online banking account.Each digit can be chosen from 0 to 9. How many different possible PIN numbers can sean chose.
is the x element (180,270), if tanx-3cotx=2, sinx ?
Substitute a=2 and b=-3 and c=-4 to evaluate 2ac/(-2b^2-a)
. What will be the osmotic pressure of a solution that was prepared at 91°F by dissolving 534 grams of aluminum hydroxide in enough water to generate 2.784 ml of solution.
How to do 15 x 3304
Three machines called A, B and C, produce 43%, 26% and 31% of the total production of a company, respectively. Furthermore, it has been detected that 8%, 2% and 1.6% of the product manufactured by these machines is defective. a) What is the probability that a product is not defective? b) A product is selected at random and found to be defective, what is the probability that it was manufactured on machine B?
nI Exercises 65-68, the latitudes of a pair of cities are given. Assume that one city si directly south of the other and that the earth is a perfect sphere of radius 4000 miles. Use the arc length formula in terms of degrees to find the distance between the two cities. 65. The North Pole: latitude 90° north Springfield, Illinois: latitude 40° north
To find the increased amount on a standard term deposit with the following conditions: starting amount: BGN 13000, type of deposit: annual, annual compound interest rate: 1.4%, after 4 years;
Read the “Local Communities as Stakeholders: Does Amazon Really Need Tax Breaks?” example on p. 83 in Ch. 3 of Management: A Practical Introduction. In your response, discuss whether you feel that tax breaks for big companies benefit local communities. Describe ways to attract business to a region without having a negative impact on the larger community.
Define excel and why we use it?
Solve the system of equations by the addition method. 0.01x-0.08y=-0.1 0.2x+0.6y=0.2
The car with an irresponsible driver starts to brake when it goes through a red light. When passing the traffic light, he does so at a speed of 115 kph in the right lane. Further ahead, 70 meters from the traffic light, a child is crossing the street and falls. If the effect of the car's brakes is equivalent to a deceleration of magnitude 5.7m/s². Is the child hit by the car or not? How far from the traffic light does the car stop?