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 March 4, 2021, 5:54 pm ad1c9bdddf
Payments for a debt with compound interest are calculated. The soultion is well presented.