Question

A single payment of $9329.41 is equivalent to a payment of $3706.12 made 2.2 years ago and a payment of what amount due in 9.7 years? Assume the rate of simple interest is 4.1% and use today as the focal date.

Answer 1

To find the payment amount due in 9.7 years, we use the formula for simple interest and calculate the interest for the previous payment made 2.2 years ago. Adding this interest to the principal gives us the total payment amount due.

Step-by-step explanation:

To find the payment amount due in 9.7 years, we need to use the formula for simple interest:

Interest = Principal * Rate * Time

Since we know the interest rate is 4.1% and the principal is $3706.12 for the payment made 2.2 years ago, we can plug these values into the formula:

Interest = $3706.12 * 0.041 * 2.2 = $334.33

Now, let's calculate the remaining payment amount:

Total payment amount = Principal + Interest

Total payment amount = $9329.41 + $334.33 = $9663.74

Therefore, the payment amount due in 9.7 years is $9663.74.