rylie owes $3000 now and $2000 in 4 months. After re - arrangement of payments, he agreed to pay $x in 6 months and $2x in 8 months from now. Determine the value of the $x using now as the focal date and the simple interest rate at 6% per annum.

Answer 1

$x = $2000
$2x = $4000

Using the simple interest formula:

I = Prt

I = 3000 x 0.06 x 6/12

I = $900

3000 + 900 = 3900

3900 - 4000 = -100

Therefore, x = 2000