Roland owes three debts: $500 due in one year; $1,500 due in two years, plus simple interest at 6%; $2,000 due in three years, plus simple interest at 5%. He wants to discharge these debts by paying $1,000 now and two equal but unknown payments in one and two years, respectively. Find the size of the equal payments if money is, at present, worth 10% simple interest. Use a focal date of two years.

Answer rating: 100% (QA)

To find the size of the equal payments to discharge Rolands debts we need to equate the present valu... View the full answer