Bob borrowed some money from Larry. He was supposed to pay Larry $1,000 5 months ago and another $800 2 months from today. Bob missed his first payment from 5 months ago. Larry is worried that Bob might not pay him back and would like the entire debt settled today. What would Larry be willing to accept as an equivalent payment from Bob today if he could earn 6% in low-risk investments

Answer rating: 100% (QA)

We can calculate the present value PV of the entire debt for Larry considering the missed payment an... View the full answer