Loan payments of $700 due three months ago and $1000 due today are to be paid by a payment of $800 in two months and a final payment in five months. If 9% interest is allowed, and the focal date is five months from now, what is the amount of the final payment (round to 2 decimal places)?
Added by Ruben H.
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First, we need to find the present value of the loan payments at the focal date (5 months from now). To do this, we'll use the formula for the present value of a single payment: PV = FV / (1 + i)^n where PV is the present value, FV is the future value, i is the Show more…
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