Claire has borrowed $\$5,\!000$. She plans to pay off the loan in full after two payments. She will make one payment 3 years from now, then another payment 6 years from now. The second payment will be exactly double the amount of the first payment. How much is the first payment if the interest rate of the loan is $8.5\%$, compounded annually? Express your answer as a dollar value rounded to the nearest cent.

Guest Sep 26, 2020

#1**+1 **

p = payment at 3 years

loan amount at 3 years = 5000 (1.085)^3 = 6386.4456

p = 1/2 (6386.4456 - p )(1.085)^3

2p / (1.085)^3 = 6386.4456 - p

p = $ 2489.05

ElectricPavlov Sep 26, 2020