Cullumber Ltd. signed an instalment note on January 1, 2020, in settlement of an account payable of $39,500 owed to Mott Ltd. Cullumber is able to borrow funds from its bank at 10%, whereas Mott can borrow at the rate of 9%. The note calls for two equal payments of blended principal and interest to be made at December 31, 2020 and 2021.

Using (1) factor Table A.4, (2) a financial calculator, or (3) Excel function PV, calculate the amount of the equal instalment payments that will be made to Mott Ltd. (Hint:Refer to Chapter 3 for tips on calculating.)(For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answer to 2 decimal places, e.g. 5,275.75.)

Click here to view the factor table PRESENT VALUE OF 1.

Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF 1.

Amount of the equal instalment to be paid $enter a dollar amount of the equal instalment to be paid