Payments of $2,300 due 18 months ago and $3,100 due in three years are to be replaced by an equivalent stream of payments consisting of $2,000 today and two equal payments due two and four years from now. If money can earn 4.75% compounded semi-annually, what should be the amount of each of these two payments?

Question

Quizplus · Accepted Answer

The Answer of Payments of $2,300 due 18 months ago and $3,100 due in three years are to be replaced by an equivalent stream of payments consisting of $2,000 today and two equal payments due two and four years from now. If money can earn 4.75% compounded semi-annually, what should be the amount of each of these two payments?

Payments of $2,300 Due 18 Months Ago and $3,100 Due