A financial obligation requires the payment of $1000.00 in nine months, and $500.00 in twelve months. When can the obligation be discharged by a single payment of $1700.00 if interest is 12% compounded quarterly?

Question

Quizplus · Accepted Answer

The Answer is Let the focal date be now; i = 0.12 ÷ 4 = 0.03; m = 4
Debts = 1000.00(1.03)^-3 + 500.00(1.03)^-4 = 1359.38
FV = 1700, PV = 1359.38
n =

Let the focal date be now; i = 0.12 ÷ 4 = 0.03; m = 4 Debts = 1000.00(1.03)<sup>-3</sup> + 500.00(1.03)<sup>-4</sup> = 1359.38 FV = 1700, PV = 1359.38 n = = = = 7.56456693 quarters The discharge date is 1 year 325 days from now.

=

= 7.56456693 quarters
Let the focal date be now; i = 0.12 ÷ 4 = 0.03; m = 4 Debts = 1000.00(1.03)<sup>-3</sup> + 500.00(1.03)<sup>-4</sup> = 1359.38 FV = 1700, PV = 1359.38 n = = = = 7.56456693 quarters The discharge date is 1 year 325 days from now.

The discharge date is 1 year 325 days from now.

A Financial Obligation Requires the Payment of $1000