Question

Find the equivalent payment that needs to be made in 9 months from today instead of...

Find the equivalent payment that needs to be made in 9 months from today instead of the following three payments.
A $350 due today, a $450 due in 12 months from today and a $300 due in 18 months from today. Interest rate is 2.5% p.a.
Math   Precalculus   
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Homework Answers

Answer #1

a)

$350 due today.

9months = 3/4 of a year.

Therefore, Interest of 9 months =

=

Therefore, Equivalent amount to be paid = $350 + $6.5625 = $356.5625

b)

$450 due today.

9months = 3/4 of a year.

Therefore, Interest of 9 months =

Therefore, equivalent amount to be paid = $450 + $8.4375 = $458.4375

c)

$300 due today.

9months = 3/4 of a year.

Therefore, Interest of 9 months =

Therefore, equivalent amount to be paid = $300 + $5.625 = $305.625

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