Answered step by step
Verified Expert Solution
Question
1 Approved Answer
6. Assume you owe $2,000 today and $2,500 one year from now. You find yourself unable to make that payment today, so you indicate to
6. Assume you owe $2,000 today and $2,500 one year from now. You find yourself unable to make that payment today, so you indicate to your creditor that you want to make both payments six months from now instead. Prevailing interest rates are at 4% compounded semi-annually. What single payment six months from now (the proposed payment stream) is equivalent to the two payments (the original payment stream)? round your answer and other calculation to two decimals
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started