college math

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Raisel borrowed money from Irlene and agreed to pay back $400 today and $300 in 5 years. If Raisel has a lot of money available now and wants to pay back the loan today, how much money would she have to pay Irlene if the loan was at 6.75% compounded quarterly? For full marks your answer(s) should be rounded to the nearest cent.

the answer is $614.67, but im not sure how to get that!

  • college math -

    i = .0675/4 = .016875

    present obligation
    = 400 + 300(1.016875)^-20 = 614.67

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