Reword the following answer: To solve this problem, we need to calculate the present value of each payment at the focal date, which is ten months from now, and then sum these present values to find the equivalent single payment. The interest rate is 5.0% per annum. ### Step-by-Step Explanation: 1. **Identify the Time Periods:** - $1,800 is due today (0 months from now). - $1,500 is due in 5 months. - $2,700 is due in 8 months. - We need to find the equivalent payment due in 10 months. 2. **Convert the Annual Interest Rate to a Monthly Rate:** - Annual interest rate = 5.0% - Monthly interest rate = 5.0% / 12 = 0.4167% per month 3. **Calculate the Present Value of Each Payment at the Focal Date (10 months from now):** - **$1,800 due today:** - Present value at 10 months = $1,800 * (1 + 0.004167)^(10) - Since this payment is due today, we need to compound it forward for 10 months. - **$1,500 due in 5 months:** - Present value at 10 months = $1,500 * (1 + 0.004167)^(5) - This payment is due in 5 months, so we need to compound it forward for 5 more months to reach the focal date. - **$2,700 due in 8 months:** - Present value at 10 months = $2,700 * (1 + 0.004167)^(2) - This payment is due in 8 months, so we need to compound it forward for 2 more months to reach the focal date. 4. **Sum the Present Values:** - Total present value at 10 months = Present value of $1,800 + Present value of $1,500 + Present value of $2,700 5. **Calculate the Equivalent Single Payment:** - The sum of the present values calculated