A man borrowed an amount of P150,600 to bank that offers an interest rate of 5.36% compounded continuously and has a maturity date of 6 years.

Question

A man borrowed an amount of P150,600 to bank that offers an interest rate of 5.36% compounded continuously and has a maturity date of 6 years. He plans to pay the loan at an amount of P15,800 at the end of 2 years, and P10,450 at the end of 3 years. 

1. How much must he pay at the end of 6 years?

2. If instead of paying an amount at the end of 2nd and 3rd year, he decided to pay by a single lump sum all the amount including the future liabilities at the end of 5 years, how much is the lump sum?

Answer 1

1)

2) A= Pe^rt

= 15600e^.0536(5)

= 15600e^.268

=15600(1.30734714)

=$20,394.62 in 5 years at 5.36% interest compounded continuously, rounded off to nearest cent