Question

A loan of $5000 is to be repaid in three equal installments due 60, 120, and 180 days after the date of the loan. If the focal date is the date of the loan and interest is 6.9% p.a., compute the amount of the installments.

Answer 1

Answer: The interest for the loan for each day is 5000 x 6.9/100 = $345.

For the first installment, the interest will be for 60 - 1 = 59 days. So, the interest for this period will be 59 x $345/365 = $166.55.

The first installment will be $5000 + $166.55 = $5166.55.

For the second installment, the interest will be for 120 - 60 = 60 days. So, the interest for this period will be 60 x $345/365 = $168.76.

The second installment will be $5000 + $168.76 = $5168.76.

For the third installment, the interest will be for 180 - 120 = 60 days. So, the interest for this period will be 60 x $345/365 = $168.76.

The third installment will be $5000 + $168.76 = $5168.76.

Therefore, each installment will be $5166.55, $5168.76, and $5168.76.

Explanation: