Asked by Tanesha Williams on May 20, 2024
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The first two of the following three payments were not made as scheduled. $1,200 was due seven months ago, $900 was due two months ago, and $1,500 is due in one month. The three payments are to be replaced by a single equivalent payment due three months from now. What should the payment be if money is worth 9.9%? Use three months from now as the focal date.
Equivalent Payment
A term related to finance that typically involves finding a payment amount that equates to an equal value under different conditions.
Scheduled
Planned or organized for a certain time or date.
Focal Date
In finance, it refers to a specific point in time used as a reference or base date for calculating the value of financial instruments or for determining the timing of cash flows.
- Master and apply the principles governing simple and compound interest.
- Invoke the concept of equivalent value to compare and contrast multiple payment options.
Verified Answer
Learning Objectives
- Master and apply the principles governing simple and compound interest.
- Invoke the concept of equivalent value to compare and contrast multiple payment options.
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