Question

A debt of P15,000 was paid for as follows: P4,000 at the end of 3 months, P5,000 at the end of 12 months, P3,000 at the end of 15 months, and a final payment F at the end of 21 months. If the rate of interest was 18% compounded quarterly, find the final payment.

Answer 1

The final payment is:

$F = (((15,000×(1 + \frac{0.18}{4}) - 4,000)×(1 + 0.045)^3 - 5,000)×(1 + 0.045) - 3,000)×(1 + 0.045)^2 = 6,221.98.$