Three Years Ago, Andrea Loaned $2,000 to Heather

question 216

Short Answer

Three years ago, Andrea loaned $2,000 to Heather. The principal with interest at 13% compounded semi-annually is to be repaid four years from the date of the loan. Eighteen months ago, Heather borrowed another $1,000 for 3½ years at 8% compounded semi-annually. Heather is now proposing to settle both debts with two equal payments to be made one and three years from now. What should the payments be if money now earns 6% compounded quarterly?

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