Question

A $9,000 loan is to be repaid in three equal payments occurring 60, 180, and 300 days, respectively, after the date of the loan. Calculate the size of these payments if the interest rate on the loan is 7 1/4%. Use the loan date as the focal date.

Answer 1

Assume simple interest rate of 7.25% p.a. and three equal payments of $x.
Future value of capital after 300 days
= 9000*(1+300/365*0.0725)
Future value of 3 equal payments made at 60, 180 and 300 days
= x + x*(1+180/365*0.0725) + x*(1+240/365*0.0725)
Equating the two and solving for x,
x=$88954047/28762= $3,092.76

Answer 2

2.53

Answer 3

25,000 at 12.35 x18months