A person has debts of $700 due in five years with interest at 3% compounded annually and $850 due in seven years with interest at 8%
compounded quarterly. The debtor wants to pay off these debts by making two payments: the first payment now, and the second, which is triple
the first payment, at the end of the fourth year. If money is worth 6% compounded annually, how much is the first payment?

Answer rating: 100% (QA)

To determine the amount of the first payment we need to calculate the present value of the two debt... View the full answer