b. Calculate the upfront amount that she should pay under the alternative paymentagreement so that the payments are equivalent.$1,050.70Round to the nearest cent Amber was supposed to make a payment of $4,500 in 3 years and another paymentfor $1,500 in 4 years to Loon Company as part of a payment plan.Instead, she is trying to reach an agreement with the company where she would payan upfront amount now, and an amount of $1,900 in 6 years. Assume that money isworth 9.00% compounded quarterly.a. Calculate the equivalent value of the $4,500 payment and the $1,500 paymenttoday.Show Transcribed Text$3,152.10 XGa. Calculate the equivalent value of the $4,500 payment and the $1,500 paymenttoday.Round to the nearest cent(b. Calculate the upfront amount that she should pay under the alternative paymentagreement so that the payments are equivalent.

Equivalent value today is present value of both payments based on time and interest rate off money…

Answered: b. Calculate the upfront amount that…

b. Calculate the upfront amount that she should pay under the alternative payment agreement so that the payments are equivalent. $1,050.70 X Round to the nearest cont

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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