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Question: A person currently has the following outstanding debts:

a. $10,000 borrowed 4 years ago with the agreement to repay the loan in 60 equal monthly payments. There are 12 payments still outstanding, and interest on the loan is 6% compounded monthly.

b. Twenty-four monthly payments of $500 owed on a loan on which interest is charged at a rate of 1% per month on the unpaid balance.

c. A bill of $3000, due in 2 years.

A loan company has offered to consolidate (shoulder/pay) these debts now if monthly payments will be made to it over the next 5 years at an interest of 14% compounded annually on the first two years and 15% compounded quarterly for the remaining three years. If the person will accept the offer of the loan company how much will the monthly payments amount to? If one single payment will be made to the loan company after 5 years, what should be the amount of this payment?

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M92868923

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