Aarthi borrowed $18,500 at 5%p.a from her father tostart her software business. at the end of 3 months she paid him $5,000 and $6,000 at the end of 8 months. how much would she have to pay him at the end of 16 months to clear the balance? pleas answer!

Answer 1

interest for 3 months = 18500(.05)(3/12) = 231.25
actual reduction of debt = 5000 - 231.25 = 4768.75

Balance after 3 months = 13731.25

interest on next 5 months = 13731.25(.05)(5/12) = 286.07
actual reduction of debt with a 6000 payment = 5713.93

balance after 8 months = 8017.32

interest for the next 8 months = 8017.32(.05)(8/12) = 267.24

final payment at month 16 is 8017.32 + 267.24 = 8284.56