QUESTION 1 TIME VALUE of MONEY A total debt of $ 1,000 due now, $4000 due 2
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QUESTION 1 TIME VALUE of MONEY
A total debt of $ 1,000 due now, $4000 due 2 years from now, and $6000 due 5 years from now is to be repaid by 3 payments.
(1) The first payment is made now.
(2) The second payment, which is 80% of the first, is made at the end of 30 months from now.
(3) The third payment, which is 60% of the second, is made at the end of 4 years from now. The annual interest rate is 4%, compounded semi-annually. Calculate the amount of each of the three payments. A timeline is required for full points.
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