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Your friend was supposed to repay a loan with a loan payment of $1,200 due in 6 months and another loan payment of $1,600
Your friend was supposed to repay a loan with a loan payment of $1,200 due in 6 months and another loan payment of $1,600 due in 3 years. However, your friend agrees to make two payments that replace the originally scheduled payments. The first replacement payment of $X is due in 2 years and the second replacement payment of $1,800 is due in 4 years. Suppose the interest is 5.6% p.a. compounded quarterly and the focal date is 2 years from now (Year 2), your friend asks for your help to determine the size of the second replacement payment, $X. Answer the following question: If you use the financial calculator TVM keys to solve for the focal date equivalent values, which TVM key on the financial calculator should be set equal to zero?
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