Two payments of $49 000 each must be made 3 year and 5 year from now....
Two payments of $49 000 each must be made 3 year and 5 year from now. If money can earn 4.9% compounded monthly, what single payment 5 years from now would be equivalent to the two scheduled payments?
Homework Answers
Present value now =Future value/(1+Rate)^number of periods
= 49000/(1+4.9%/12)^(3*12) + 49000/(1+4.9%/12)^(5*12)
= 42314.07+ 38371.66
= 80685.73
Value of the payment 5 years from now = PV*(1+rate)^n
= 80685.73*(1+4.9%/12)^(5*12)=
| 103034.40 |
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