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Loan payments of $1,800 due in one year and $2,100 due in two years are to be replaced by two payments. The first replacement
Loan payments of $1,800 due in one year and $2,100 due in two years are to be replaced by two payments. The first replacement payment $X is due in three years and the second replacement payment of $2,700 is due in four years. Determine the size of the first replacement payment $X if interest is 4.7% p.a. compounded quarterly and the focal date is three years from now (Year 3). Answer the following questions, and choose the closest answer from the possible choices following each question: If the focal date is at year 3, which TVM variable does the payment of $1,800 represent? Choose.... If the focal date is at year 3, which TVM variable does the replacement payment Choose... of $2,700 represent? If you need to use the formula approach to find the focal date value manually, what value of "n" should you apply to the second replacement payment of $2,700? What periodic interest rate do you use Choose...
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