First of all, reply is not a transitive verb; that is, it does not take a direct object, so you shouldn't say "I will reply you" but either "I will reply" (if the target of your reply is obvious) or "I will reply to you" (if you need to specify who is receiving the reply).
Other than that, the statement you have is acceptable, if not entirely idiomatic. I would not normally expect reply to be the verb of choice in this situation; respond feels somewhat more natural. However, the most likely idiom for informing someone of your decision is "I will let you know."
Beyond that, it's also common to shorten up "no later than" to "by", which has an identical meaning in this circumstance.
So, combining those, a normal native response would be
I'll think about it and let you know by Friday.