Answer to Question #225931 in Financial Math for Syax

Question

Anita has a debt of RM5,000 to pay in 9 months. Anita received a new agreement to make the two equal payment, one now and another at the end of the 18 months. Find the size of this payment if interest is charged 9% per annum using the 9 months as the focal date.

Answer 1

Assume repayment =x

left debt =5000-x (after the first repayment)

after 18 months we have $5000-x\times 9\%/12\times18=(5000-x)\times 13.5\% interest$

$X=(5000-x)\times 13\% +(5000-x)$

$x=2658.1$

the repayment is Rm2658.1