question archive A payment of $1,050 scheduled to be paid today and a second payment of $1,340 to be paid in eight months from today are to be replaced by a single equivalent payment
A payment of $1,050 scheduled to be paid today and a second payment of $1,340 to be paid in eight months from today are to be replaced by a single equivalent payment
Subject:FinancePrice:2.86 Bought9
A payment of $1,050 scheduled to be paid today and a second payment of $1,340 to be paid in eight months from today are to be replaced by a single equivalent payment.
What total payment made today would place the payee in the same financial position as the scheduled payments if money can earn 6.25%? (Do not round intermediate calculations and round your final answer to 2 decimal places.)
Equivalent payment _____$
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Present value = Future value/(1+i)^n
i = interest rate per period
n= number of periods
=>
equivalent single payment = 1050 + 1340/(1+0.0625)^(8/12)
= 2336.92
