Question
A debtor offers to repay a debt by making a payment of $500 one year from today, $3,000 three years from today, and $4,000 four
A debtor offers to repay a debt by making a payment of $500 one year from today, $3,000 three years from today, and $4,000 four years from today. The lending agency would rather receive the money in 4 equal end of year payments. Assuming a TVOM of 6%, how much would the debtor need to pay to make these cash flows equivalent?
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Principles Of Macroeconomics
Authors: Frank, Bernanke, Antonovics, Heffetz
3rd Edition
1259117162, 9781259117169
