Explore BrainMass

Explore BrainMass

    Business Math : Compounding Interest - Amount of Payments

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    John recently incurred the following debts:
    1. $500 due in one year
    2. $800 plus interest at 12% compounded semi-annually due in two years.

    He wishes to discharge these debts by making 3 equal payments. The first payment will be due in 6 months, the second in 18 months and the third in 30 months. What is the size of these payments if money is worth 10% compounded quarterly and a focal date of 18 months is used for evaluation purposes?

    © BrainMass Inc. brainmass.com June 3, 2020, 5:11 pm ad1c9bdddf
    https://brainmass.com/business/business-math/compounding-interest-amount-payments-17069

    Solution Summary

    Payments for a debt with compound interest are calculated. The soultion is well presented.

    $2.19

    ADVERTISEMENT