The first payment will be due in 6 months the second in 18, Ask an Expert

Accounting

John recently incurred the following debts:

1. $500 due in one year

2. $800 plus interest at 12% compounded semi-annually due in two years.

He wishes to discharge these debts by making 3 equal payments. The first payment will be due in 6 months, the second in 18 months and the third in 30 months. What is the size of these payments if money is worth 10% compounded quarterly and a focal date of 18 months is used for evaluation purposes?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9396354

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