Scheduled debt payments of $750 due seven months ago, $600 due two months ago, and $900...

Scheduled debt payments of $750 due seven months ago, $600 due two months ago, and $900 due in five months are to be settled by two equal replacements payments due now and three months from now. Determine the size of the equal replacement payments at 9% p.a. compounded monthly.

Expert Solution

Equating Cash Flows today,

750(1 + 0.09/12)⁷ + 600(1 + 0.09/12)² + 900/(1 + 0.09/12)⁵ = X + X/(1 + 0.09/12)³

X = $1,145.85

jeff jeffy answered 2 years ago

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