Your friend Thomas Magnum borrowed money from you and is supposed to pay you back $1,000 in 1 month, and $2,000 in 6 months. Thomas can't make the first payment but wants to pay you back all the money he owes in 3 months. What is the equivalent amount 3 months from now if interest rates are 6.25%, compounded monthly?
Your friend Thomas Magnum borrowed money from you and is supposed to pay you back $1,000 in 1 month, and $2,000 in 6 months. Thomas can't make the first payment but wants to pay you back all the money he owes in 3 months. What is the equivalent amount 3 months from now if interest rates are 6.25%, compounded monthly?
Chapter4: Time Value Of Money
Section4.17: Amortized Loans
Problem 1ST
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Your friend Thomas Magnum borrowed money from you and is supposed to pay you back $1,000 in 1 month, and $2,000 in 6 months. Thomas can't make the first payment but wants to pay you back all the money he owes in 3 months. What is the equivalent amount 3 months from now if interest rates are 6.25%, compounded monthly?
Transcribed Image Text:5. Your friend Thomas Magnum borrowed money from you and is supposed to pay you
back $1,000 in 1 month, and $2,000 in 6 months. Thomas can't make the first payment
but wants to pay you back all the money he owes in 3 months. What is the equivalent
amount 3 months from now if interest rates are 6.25%, compounded monthly?
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