Question

Will must make quarterly estimated income tax payments to the Internal Revenue Service. The amounts and timing of these payments are shown below. Also shown are the monthly interest rates that apply to each interval of time. What is the P-equivalent of Will's payments on January 15? Jan. 15 April 15 June 15 Sept. 15 i= 1/4% i=112% ;= 3/4% mo. mo. mo. $8,000 $10,000 $11,000 $8,000 The P-equivalent of Will's payments on January 15 is $ . (Round to the nearest dollar.)

Answer 1

Answer porsent value factor for parment mode on April 15 - for the payment made on aprilis = 0.as.fronth. : Period, n = 3 monits. po doctor for payment mode on epis= (htig S = (1+0.com) 0.992537 Pinterest rank for the payment made on June 15 = 0.50), pormnth (from Apr 15) Period from April 15 to June 15 = amarelha. pr factor for the payment moode on June,15 al aprolus = lib.sohje SO) =0.990015 present value factor for the payment made on June, 15 at Tan, 15 ... = 0.990075 X0.992537 0.98.2686

interest york for the payment meck on sept, 152 0.45. por manth @ from sune is). (from a period from June 15 to sep 15 = 3 months present valuie fac tor for the payment mode on sep, is at June 15- (14.0.75-4,53 - 0.977833 present value factor for the propment made on sep, 15 at Jan, 15 = 0.977833 X 0.98 2686 = 0.960903 Tal,15 = 8,000 + 10,000 X 0.99 2537 + 11,000x0.98 2686 +8,000 X0.960903. $36422 si The p-equivalent d wil's payments on Jan, 15 = $36,482.