A financial obligation was to be settled in two payments. The first payment of $2,000 was due 2.0 years ago. The second payment of $2,000 is due 3.5 years from now. The debtor missed the first payment and has proposed to settle the obligation with two payments that will be the ecomonic equivalent of the original two payments. The debtor has proposed a payment of $1,000 today and a second payment in 2.5 years from now. 

What should the second payment be if money can earn 12% compounded monthly?
 

Answer rating: 100% (QA)

We must determine the future value of the planned 1000 payment today at an interest rate of 12 compo... View the full answer