question archive April has the following debts: She owes Jade $650 in 9 years, owes Carly $850 in 3 years, and owes Sarah $500 in 10 years
April has the following debts: She owes Jade $650 in 9 years, owes Carly $850 in 3 years, and owes Sarah $500 in 10 years
Subject:FinancePrice:2.86 Bought12
April has the following debts: She owes Jade $650 in 9 years, owes Carly $850 in 3 years, and owes Sarah $500 in 10 years. However, Jade, Carly and Sarah all owe Heidi even more money than April owes each of them. April decides to pay off all of her debts by paying Heidi a single payment today. What is the size of the single payment if the interest rate is 3% compounded monthly?
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The monthly rate will be = 3/12% = 0.25%. The present value equation will be written as
PV = 650/1.0025^(9 x 12) + 850/1.0025^(3 x 12) + 500/1.0025^(10 x 12) = 1643.84
