Question

21. When Rachel borrowed $2400, she agreed to repay the loan in two equal payments, to be made
90 days and 130 days from the day the money was borrowed. If interest is 8.25% on the loan, what
is the size of the equal payments if a focal date of today is used?​

Answer 1

Given :  Rachel borrowed $2400, she agreed to repay the loan in two equal  payments, to be made 90 days and 130 days from the day the money was borrowed

interest is 8.25% on the loan

To find :  size of the equal payments

Solution:

Let say equal payments = E  $

Rachel borrowed $2400 = P

R = 8.25 %

SI = P * R * T /100

Interest in 90 Days      =  2400  * 8.25 * (90/365)  / 100  = $48.8

Paid = E

Remaining Amount to be paid =  2400 + 48.8 - E   = 2448.8 -

Interest on remaining amount in 130-90 = 40 days  = (2448.8 - E ) * 8.25 * (30/365)/100

2448.8 - E   +   (2448.8 - E ) * 8.25 * (40/365)/100  =  E

=>  (2448.8 -  E)  ( 1.009) = E

=>  2448.8 * 1.009 = 2.009 E

=> E = 1229. 9  =   1230 $

size of the equal payments =   1230 $

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