(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

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- Oct 7th 2009, 04:34 PM #1

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## Refinance

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).

- Oct 7th 2009, 06:40 PM #2

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- Oct 7th 2009, 06:41 PM #3

- Oct 7th 2009, 06:45 PM #4

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