OPMT 1110 Business Mathematics Page 2 of 2 6. 60 days ago, you loaned a friend $690. 28 days ago, you loaned another $128. You also allowed your friend to charge a $2,580 to your credit card, for which you will be charged 30 days from now. Your friend agrees to pay you back with 5% simple interest. She paid you $500 today and will repay the remainder with 2 equal payments in 30 and 60 days from now. (a) What is the size of the 2 equal payments she will pay you? Use 30 days from now as the focal date. (b) How much interest does she pay you in total? 7. A few months ago you bought a condominium in the Olympic Village. You didn't have the money for the deposit on the apartment so you borrowed it from your brother-in-law, Vinnie. Today, you were supposed to pay him $12,000 and one year from now pay him $7,250. Unfortunately, your company has downsized and you were laid off from your job as a sales manager. You cannot afford to make the $12,000 payment that is due today. One of Vinnie's business associates, Antonio, a large muscular man with lots of tattoos, and missing front teeth, drops by to collect the money. Antonio is a scary looking guy so you immediately promise to pay off both debts by making a payment 5 months from now and a second payment 1% years from now. Antonio growls but begrudgingly agrees to accept this new payment arrangement. He warns you that you must pay on time or else. You are afraid to ask him what he means by "or else". Because Vinnie is your brother-in-law, he charges you only 8% simple interest. (a) The first payment will be $3,000 larger than the second payment. Find the size of each payment. Use 5 months as the focal date. (b) Suppose, instead, that the first payment will be twice as large as the second payment. How would you set it up? A man owes $100, due in two months, and $400, due in eight months. His creditors have agreed to settle his debts by two equal payments in four months and ten months, respectively. Find the size of each payment if the rate of interest is 6% and the comparison date is four months hence. 4. Several months ago you signed a contract to buy $4,175 worth of equipment for your business. You didn't have the money to pay the $4,175 so the seller agreed to finance it at an interest rate of 10% simple. Today, the first payment of $2,000 is due and 2 years from now a payment of $3,000 is due. (a) Do you owe $5,000? (b) You cannot afford to make today's payment so you call the seller and arrange to pay the entire amount at the end of 2 years. Find the size of the payment. (c) You won some money at the casino today so you decide to pay off both debts today. Find the size of the payment. T 100 7. A few months ago you bought a condominium in the Olympic Village. You didn't have the money for the deposit on the apartment so you borrowed it from your brother-in-law, Vinnie. Today, you were supposed to pay him $12,000 and one year from now pay him $7,250. Unfortunately, your company has downsized and you were laid off from your job as a sales manager. You cannot afford to make the $12,000 payment that is due today. One of Vinnie's business associates, Antonio, a large muscular man with lots of tattoos, and missing front teeth, drops by to collect the money. Antonio is a scary looking guy so you immediately promise to pay off both debts by making a payment 5 months from now and a second payment 1% years from now. Antonio growls but begrudgingly agrees to accept this new payment arrangement. He warns you that you must pay on time or else. You are afraid to ask him what he means by "or else". Because Vinnie is your brother-in-law, he charges you only 8% simple interest. (a) The first payment will be $3,000 larger than the second payment. Find the size of each payment. Use 5 months as the focal date. (b) Suppose, instead, that the first payment will be twice as large as the second payment. How would you set it up? OPMT 1110 Business Mathematics Page 2 of 2 6. 60 days ago, you loaned a friend $690. 28 days ago, you loaned another $128. You also allowed your friend to charge a $2,580 to your credit card, for which you will be charged 30 days from now. Your friend agrees to pay you back with 5% simple interest. She paid you $500 today and will repay the remainder with 2 equal payments in 30 and 60 days from now. (a) What is the size of the 2 equal payments she will pay you? Use 30 days from now as the focal date. (b) How much interest does she pay you in total? 7. A few months ago you bought a condominium in the Olympic Village. You didn't have the money for the deposit on the apartment so you borrowed it from your brother-in-law, Vinnie. Today, you were supposed to pay him $12,000 and one year from now pay him $7,250. Unfortunately, your company has downsized and you were laid off from your job as a sales manager. You cannot afford to make the $12,000 payment that is due today. One of Vinnie's business associates, Antonio, a large muscular man with lots of tattoos, and missing front teeth, drops by to collect the money. Antonio is a scary looking guy so you immediately promise to pay off both debts by making a payment 5 months from now and a second payment 1% years from now. Antonio growls but begrudgingly agrees to accept this new payment arrangement. He warns you that you must pay on time or else. You are afraid to ask him what he means by "or else". Because Vinnie is your brother-in-law, he charges you only 8% simple interest. (a) The first payment will be $3,000 larger than the second payment. Find the size of each payment. Use 5 months as the focal date. (b) Suppose, instead, that the first payment will be twice as large as the second payment. How would you set it up? A man owes $100, due in two months, and $400, due in eight months. His creditors have agreed to settle his debts by two equal payments in four months and ten months, respectively. Find the size of each payment if the rate of interest is 6% and the comparison date is four months hence. 4. Several months ago you signed a contract to buy $4,175 worth of equipment for your business. You didn't have the money to pay the $4,175 so the seller agreed to finance it at an interest rate of 10% simple. Today, the first payment of $2,000 is due and 2 years from now a payment of $3,000 is due. (a) Do you owe $5,000? (b) You cannot afford to make today's payment so you call the seller and arrange to pay the entire amount at the end of 2 years. Find the size of the payment. (c) You won some money at the casino today so you decide to pay off both debts today. Find the size of the payment. T 100 7. A few months ago you bought a condominium in the Olympic Village. You didn't have the money for the deposit on the apartment so you borrowed it from your brother-in-law, Vinnie. Today, you were supposed to pay him $12,000 and one year from now pay him $7,250. Unfortunately, your company has downsized and you were laid off from your job as a sales manager. You cannot afford to make the $12,000 payment that is due today. One of Vinnie's business associates, Antonio, a large muscular man with lots of tattoos, and missing front teeth, drops by to collect the money. Antonio is a scary looking guy so you immediately promise to pay off both debts by making a payment 5 months from now and a second payment 1% years from now. Antonio growls but begrudgingly agrees to accept this new payment arrangement. He warns you that you must pay on time or else. You are afraid to ask him what he means by "or else". Because Vinnie is your brother-in-law, he charges you only 8% simple interest. (a) The first payment will be $3,000 larger than the second payment. Find the size of each payment. Use 5 months as the focal date. (b) Suppose, instead, that the first payment will be twice as large as the second payment. How would you set it up