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A person has a debt of $3000 now and $2000 in three years' time and agrees to pay back these debts with a payment of
A person has a debt of $3000 now and $2000 in three years' time and agrees to pay back these debts with a payment of $2500 in two years and a further payment, four years from now. If the interest rate is 2.5% p.a. compounded semi-annually, what is the value of the unknown last payment? (For full marks in this question, you must draw a timeline and indicate on the timeline where all debts are due, and payments are to be made.)
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