Question

Debt payments of $600 in two months and $800 in five months are schedule to be due. If interest at 6.2% is to be allowed, what single payment today is required to settle the two scheduled payments?

Answer 1

Answer:

$1,722.40

Step-by-step explanation:

Step 1  Figure out how much interest for 1 month for the $600.00 for 2 months loan ($37.20)

Step 2 Then multiple that by 2 ($74.40)  

Step 3 Add $600.00 and $74.40 together ($674.40)

Step 4 Figure out how much interest for 1 month of the $800 for 5 months loan ($49.60)

Step 5 Then multiply that by 5 ($248.00)

Step 6 Add $800.00 and $248.00 together ($1,048.00)

Step 7 Add both $674.40 and $1,048.00 together (1,722.40)