Calculate the Single Equivalent Payment to Settle Debts
What is the single equivalent payment needed to settle the debts at a focal date 90 days from today?
Original Debts
- $1500 due today
- $2800 due in 30 days
- $400 due in 160 days
The single equivalent payment to settle the debts at the focal date 90 days from today is $4762.08.
To find the single equivalent payment to settle the debts at a focal date 90 days from today with a simple interest rate of 11% per annum, we need to calculate the future values of each debt and then add them together.
Debt 1: $1500 due today
Since the debt is due today, the future value is the same as the present value: $1500.
Debt 2: $2800 due in 30 days
To calculate the future value of this debt at 90 days from today, we need to account for the additional 60 days.
Debt 3: $400 due in 160 days
To calculate the future value of this debt at 90 days from today, we need to subtract 90 days from the original 160 days.
Now, we can add up the future values of all the debts:
Total future value = $1500 + $2853.31 + $408.77
Total future value = $4762.08
Therefore, the single equivalent payment to settle the debts at the focal date 90 days from today would be $4762.08.