Joe was supposed to pay Shelby $3,700, 6 months ago, and $2,020, 5 months from now. If he wants to reschedule these payments with two payments, one payment of $2,700 today and the balance 3 months from now, calculate the balance amount. Assume that the simple interest charged is 6.25% p.a. and the agreed focal date is 3 months from now.

Include a well-labelled timeline as part of a complete solution.

Round to the nearest cent