You are owed $7,500 to be paid in one year. Instead you are requested to accept...

 

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You are owed $7,500 to be paid in one year. Instead you are requested to accept three equal and unknown payments (call them X) due today, 6 months from now, and 2.5 years from now. What is the value of the unknown payments, if the interest rate is 5% p.a., and the focal date is one year from today? Make sure you draw the timeline for this question. You are owed $7,500 to be paid in one year. Instead you are requested to accept three equal and unknown payments (call them X) due today, 6 months from now, and 2.5 years from now. What is the value of the unknown payments, if the interest rate is 5% p.a., and the focal date is one year from today? Make sure you draw the timeline for this question.

Answer rating: 100% (QA)

Analyzing the Loan Option Timeline Today 0 6 Months 05 1 Year 1 Focal Date 25 Years 25 X X 7500 Present Value Unknown Payment X We need to find the pr... View the full answer