Question: Patrice defaulted on payments of $1000 due one year ago and $1500 due six months ago. A Small Claims Court orders her to make three

Patrice defaulted on payments of $1000 due one year ago and $1500 due six months ago. A Small Claims Court orders her to make three payments—$800 one month from now, $900 four months from now, and a third payment seven months from now. The third payment is to be determined so that the creditor will end up in the same economic position as if the original payments had been made on time. The court set the fair rate of return at 4.2% compounded monthly. What should the third payment be?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

Let x represent the amount of the thirdreplacement paymen... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Corporate Finance Questions!

Patrice defaulted on payments of $1000 due one year ago and $1500 due six months ago. A Small Claims Court orders her to make three payments-$800 one month from now, $900 four months from now, and a...

Patrice defaulted on payments of $1000 due one year ago and $1500 due six months ago. A Small Claims Court orders her to make three payments$800 one month from now, $900 four months from now, and a...

Unit 6 Exercises Chapter 9: Section 9.1 (B) 4. For a sum of money borrowed at 16% compounded daily for 2 years, state (a) the nominal annual rate of interest (j); (b) the number of compounding...

ment stream consists of three payments:$1000 due today, $1500 due 70, days from A pay today, and $2000 due 210 days from today what single payment, G0 days from today, is economi ically equivalent to...

4. Using the financial ratios provided by eVal, evaluate any trends in Royal Caribbean?s return on equity, compare it with Carnival Cruise?s return on equity, and discuss the main causes of any...

answer the questions in the files. mc and some questions 1. Present Value of Multiple Annuities (LG4) A small business owner visits his bank to ask for a loan. The owner states that he can repay a...

Hi! i need help with this case. thanks! **** NO CONSIDER THE PARTS WHERE REFER A PAGE NUMBER***** Introduction A great deal of marketing is qualitative as it deals with creative ideas, attaching to...

THE ICE CREAM PROJECT Part I: Drafting the Buyer's Contract Please read the (below) Background carefully. It will provide you with information aboutthe businessyou represent and for which you will...

Please help with the nine questions with detailed process on page six! able to garner an agreement with Manna Healthcare that allowed him to operate his laboratory on the REALIZING A DREAM :...

hi! i need help with this questions. thanks! When considering if StaGreen can capture the Consumer market, there are qualitative considerations as well as quantitative ones: Does StaGreen offer a...

4. Look at the screen of echocardiography (heart ultrasound). Look at the calculated volumes of heart chambers and calculate the ejection fraction (EF) Diastole Systole LV EF = ?? LV EDV = 135.7 mi...

When 3-methyl-1-butene reacts with HBr, two alkyl halides are formed: 2-bromo-3 methylbutane and 2-bromo-2-methylbutane. Propose a mechanism that explains the formation of these products.

3 4 A disadvantage of using the payback period to compare investment allematives is that: 3 . 6 2 points Multiple Choice 0 1 0 7 . 3 4 It ignores cash flows beyond the payback period It cannot be...

Charlotte borrows $20,000 from the bank to help her expand her business. She agrees to repay the money in equal payments at the end of each year for 9 years. Interest is at 8.9% compounded annually....

Identify five items that are adjustments to convert net income to net cash provided by operating activities under the indirect method.

Why is the statement of cash flows useful?

Describe the direct method for determining net cash provided by operating activities.

3-15. The City of Grafton's records reflected the following budget and actual data for the General Fund for the fiscal year ended June 30, 2020: 1. Estimated revenues: 2. Revenues: Taxes (property)...

The following data relate to two output levels of a department: Machine hours Overheads 18,000 380,000 20,000 390,000 The variable overhead rate was 5 per hour. The amount of fixed overhead was A...

ACC company makes and sells two products X and Z: Price Variable cost X 6 Z 10 3 5 For every two units of X sold, one unit of Z will be sold and the total fixed costs total 20,000. Calculate the...