BMAT 230 Question

[Peter0120]

Hello,
Does anyone know how to solve this question? Thanks

Maria currently owes $15,000 to a friend who is charging her interest of 2.80% p.m. She is required to settle the loan with two equal payments, one today and the other in six months. Calculate the size of the payments using six months as the focal date.

 

[Deleted member 4993]

Hello,
Does anyone know how to solve this question? Thanks

Maria currently owes $15,000 to a friend who is charging her interest of 2.80% p.m. She is required to settle the loan with two equal payments, one today and the other in six months. Calculate the size of the payments using six months as the focal date.

What is the definition of "focal date"?

Please show us what you have tried and exactly where you are stuck.

Please follow the rules of posting in this forum, as enunciated at:

READ BEFORE POSTING​

Please share your work/thoughts about this problem.

 

[HallsofIvy]

Let "A" be the amount to be paid now. Then she is effectively borrowingt $15000- A for 6 months at 2.8% per month. The (simple) interest will be 6(0.028)(15000-A)= 2520- 0.168A so the total amount to be paid will be 15000+2520-0.168A= 17520- 0.168A.

That is to be paid in two equal payments so
2A= 17520- 0.158A

2.158A= 17520
A= 17520/2.158= $8118.63