Question

71 Payments of $1,750 and $1,600 are due four months from now and nine months from now, respectively. What single payment is required to pay off the two scheduled payments today if interest is 9% p.a. and the focal date is today? 8) Scheduled payments of $800 due two months ago and $1,200 due in one month are to be repaid by a payment of $1.000 today and the balance in three months. What is the amount of the final payment if interest is 7.75% p.a. and the focal date is one month from now?

Answer 1

i =9% p.a

A=1750 n = 4

A =1600= n 9months

per month interest = 9/12 =0.75/100= 0.0075

investment P = (1/1+i)ⁿ* A

(1/1+0.0075)^{4 *} 1750 + (1/1+0.0075)⁹*1600

0.970554*1750   + 0.934963*1600

=3194.41$ SHOULD BE INVESTED