In: Accounting
To finance his small business, Sahithi borrowed $15,000 eight
months ago and an additional $4,200 three months ago. If the loans
carry interest at 4.25%, what single payment can Sahithi make five
months from now to fully repay the debt? (Do not round
intermediate values. Round your answer to 2 decimal
places.)
please i need the answers to these questions as quick as possible
We have to calculate Final value of both the borrowed amounts i.e principal + Interest.
So for borrowed amount of $15000
Sahithi had taken loan eight months ago .So till today Interest for 8 months would have been accrued on this amount
Interest amount for 8 months will be $15000 * 4.25% * 8/12 = $425. So today's value of loan is $15000 + $425 = $15425
Now we Sahithi have to repay this loan 5 months from today . So we have to add 5 months interest to today's amount .
It will be $15000 * 4.25% * 5/12 = $265.63
So Amount Sahithi have to pay after 5 months for 1st loan will be $15425 + $265.63 =$15690.63
Similarly for 2nd loan amount of $4200
Sahithi had taken loan three months ago .So till today Interest for 3 months would have been accrued on this amount.
So interest for 3 months will be $4200 * 4.25 % * 3/12 = $44.63. So today's value of this loan is $4200 + $44.63 = $4244.63
Now Sahithi have to repay this loan 5 months from today . So we have to add 5 months interest to today's amount .
It will be $4200 * 4.25% * 5/12 = $74.38
So Amount Sahithi have to pay after 5 months for the 2nd loan = $4244.63 + $74.38 = $4319.01
So one single payment Sahithi can made after five months will be $15690.63 + $4319.01 = $20009.64