Originally Posted by

**Stev381** For part a)

If you want the present value, then it is good.

For b)

I assume she made the down payment, you have to accumulate the 10 missed payment using the future value forumla :

$\displaystyle FV = 315 * \left[ \frac{(1.0067)^{10}-1}{0.0067} \right]=3246.69$

Now remeber that this formula gives you what she owe at time 10 not eleven,

accumulate it one time :

3036.97(1.0067) = 3268.44$

Now this is the tricky part, we have accumulated this amount at time eleven and she is to make a payment a time 11, hence use the annuity due formula to get the present value of all the future payment (26 payments):

$\displaystyle PV = 315 * \left[ \frac{1-(1.0067)^{-26}}{0.0067} \right](1.0067)=7543.58$

Add the PV and the FV = 10812.02$