question archive Payments of $4,400, due 80 days ago, and $4,900, due in 70 days, are to be replaced by payments of $4,800 due today and the balance due in 30 days
Payments of $4,400, due 80 days ago, and $4,900, due in 70 days, are to be replaced by payments of $4,800 due today and the balance due in 30 days
Subject:FinancePrice:2.86 Bought12
Payments of $4,400, due 80 days ago, and $4,900, due in 70 days, are to be replaced by payments of $4,800 due today and the balance due in 30 days. What must the second payment be if the payee is to end up in an equivalent financial position? Money now earns 9.15%. Use 30 days from now as the focal date. (Use 365 days a year. Do not round intermediate calculations and round your final answer to 2 decimal places.) Second payment ____ $
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Present value = Future value/(1+i)^n
i = interest rate per period
n= number of periods
=>
using focal date as 30 days from now
=>
4800 * (1+0.0915)^(30/365) + second payment = 4400 * (1+0.0915)^(110/365) + 4900 * (1+0.0915)^(100/365)
=>
second payment = 4701.94
