1) Debts of $7,000 due 4 years ago from today, $5,000 due in 3 months from today and $6,000 due in 30 months from today, will ALL be replaced by a single equivalent value payment in 1 year from today. If the cost of money is 12% p.a. and the focal point is in 1 year from today, how large should that single payment be? Hint: "timeline" PMT ------- --- today focal point

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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1) Debts of $7,000 due 4 years ago from today, $5,000 due in 3 months from today
and $6,000 due in 30 months from today, will ALL be replaced by a single
equivalent value payment in 1 year from today. If the cost of money is 12% p.a.
and the focal point is in 1 year from today, how large should that single payment
be?
Hint: "timeline"
PMT
--
today
focal point
Transcribed Image Text:1) Debts of $7,000 due 4 years ago from today, $5,000 due in 3 months from today and $6,000 due in 30 months from today, will ALL be replaced by a single equivalent value payment in 1 year from today. If the cost of money is 12% p.a. and the focal point is in 1 year from today, how large should that single payment be? Hint: "timeline" PMT -- today focal point
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