Present , future value
Payments of $1000 and $7500 were originally scheduled to be paid five months ago and four months from now , respectively. The first payment was not made. What payment two months from now is equivalent to the scheduled payments if money can earn 6 1/4% ?
if the first step is to find the pv then
S = 7500
R = 0.0625
T = 4/12
7500 = P ( 1 + 0.0625 * 4/12 )
7500 = 1.02083P
P = 7346.94p
From there i'm puzzeled on what i should do(Headbang)(Punch)(Angry)
Are you supposed to be using Simple Interest?
Originally Posted by diehardmath4
You do NOT need the PRESENT Value. You need the value at the time of the payment.
$1000 @ -5
$7500 @ +4
Value When Due (two months later)
$1000 @ -7
$7500 @ +2
Now add them up. $1000(1 + 0.0625*(7/12)) + $7500(1 - 0.0625*(2/15))
This is Simple Interest. Other assumptions will produce other values.