Question 3

To pay off a loan of R7 000 due now and a loan of R2 000 due in 14 months time, Mrs Slovo agrees to make three payments in two, five and ten months time respectively. The second payment is to be double the first and the third payment is to be triple the first. What is the approximate payment at month five if interest is calculated at 16% per year, compounded monthly?

[1] R3 164,86

[2] R4 627,26

[3] R1 582,43

[4] R3 000,00

[5] R4 500,00