A $6400 payment due 3 1/2 years ago has not been paid. If money can earn 3.95% compounded annually, what amount paid 4 1/2 years from now would be the economic equivalent of the missed payment? (Round your answer to 2 decimal places.)
Added by Stephanie M.
Step 1
To find the economic equivalent of the missed payment, we first need to calculate its present value. The missed payment of $6400 was due 3 1/2 years ago. The interest rate is 3.95% compounded annually. We use the formula for present value (PV) with compound Show more…
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