Does any body know a quick easy way to solve this problem:
A small business has 2 loans to repay.the 1st loan $45000 at7.3% pa,is due as a single repaymnet in 5 yrs tme.the 2nd loan of $10000 at 6.8% pa is due to be completly paid as a single repayment in 3 yrs.the business owner approaches a bank and the bank agrees to refinance the loans at 7.25% pa due in 6 yrs time as a single repayment.how much does the business have to repay the bank in 6 yrs time.
(all interest rates compound yearly).
(PV = Present Value)
a = PV of 45000 ; 45000 / 1.073^5
b = PV of 10000 ; 10000 / 1.068^3
New loan: (a + b)(1.0725)^6
I think the 45000 and the 10000 are amounts due 5 and 3 years from now, Robb;
Anyhoo....we can let Heatly take his pick (Wondering)