A customer payments of $400 due eight months ago and $650 due three months ago were not made. Now the customer is proposing to settle by two future payments that provide for a 7.5% compounded monthly rate of return to the creditor on the missed payments. The first payment will be made in two months. The second payment, twice as large as the first, will be made in seven months.

Required: What is the amount of each payments and is this proposal acceptable ?