Question
1.) a.) Scheduled payments of $1000 due in six months with interest at 5% compounded quarterly and $1300 due in 24 months with interest at
1.) a.) Scheduled payments of $1000 due in six months with interest at 5% compounded quarterly and $1300 due in 24 months with interest at 5% compounded quarterly are to be replaced by two equal payments. The first replacement payment is due today and the second payment is due in three years. Determine the size of the two replacement payments if interest is 3.8% compounded monthly and the focal date is today.
The size of the two replacement payments is $_____
b.) Payments of $1000, $1200, and $1500 are due in six months, eighteen months, and thirty months from now, respectively. What is the equivalent single payment two years from now if money is worth 9.6% compounded quarterly?
The size of the equivalent single payment is $_____
c.) If an investment of $985.00 earned interest of $368.00 at 7.5% compounded monthly, for how many years and months was the money invested? State your answer in years and months (from 0 to 11 months).
The money was invested for _____ year(s) and ______ month(s).
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