A owes B $1600 but it is not due for payment till the end of 3 years from this date. How much should A pay B if he is willing to accept now in order to clear off the debt: (a) taking money to be worth 5% per annum simple interest (b) taking it to be worth 5% per annum compound interest, payable yearly?
A owes B $1600 but it is not due for payment till the end of 3 years from this date. How much should A pay B if he is willing to accept now in order to clear off the debt: (a) taking money to be worth 5% per annum simple interest (b) taking it to be worth 5% per annum compound interest, payable yearly?
