Lebron has two options to pay off a loan. i) He can pay $918 at the end 3 months and another $467 at the end of 7 months OR ii) He can pay $ X at the end 1 months and $ 3X at the end of 6 months. Determine X if the interest is 4% and the focal date is 6 months so that the options are equivalent.
Mortgages
A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.
Mortgage
The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.
Lebron has two options to pay off a loan.
i) He can pay $918 at the end 3 months and another $467 at the end of 7 months
OR
ii) He can pay $ X at the end 1 months and $ 3X at the end of 6 months.
Determine X if the interest is 4% and the focal date is 6 months so that the options are equivalent.
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