A payment of 5000 was due three months ago and another payment of 8000 is due...

A payment of 5000 was due three months ago and another payment of 8000 is due in nine months calculate the value of a single payment to be made in 5 months that is equivalent to these two payments if money earns 6% p.a simple interest three month’s ago and 6.25% p.a of simple interest starting from today and there after

Expert Solution

Single payment =

$13,044.41

Amount due 3 months ago	5000
Value today	$5,075.38
Value after 5 months from today	$5,208.93

Amount due after 9 months	8000
Value after 5 months	$7,835.48

Total payment to be made after 5 months	$13,044.41

Workings

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