Question: How can you determine whether two payments are equivalent to each other? a. Calculate the future value of the earlier payment at the date of

How can you determine whether two payments are equivalent to each other?

  • a. Calculate the future value of the earlier payment at the date of the later payment. If the future value is equal to the later payment, the two payments are equivalent.
  • b. Calculate the present value of the later payment at the date of the earlier payment. If the present values are equal, the two payments are equivalent.
  • c. Both a and b are correct
  • d. Neither a or b are correct

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