Question

Jane was due to make loan payments of $1695 eight months ago. $4690 five month ago, and $704 in five months. Instead, she is to make a single payment today If money is worth 4.3 a and the agreed focal oate is today, what is the size of the replacement payment? The replacnment paymert is s (Round the Snal answer to the nearest cent as needed.

Answer 1

To find the size of the replacement payment, calculate the present value of the loan payments using the formula for present value.

Step-by-step explanation:

To find the size of the replacement payment, we need to calculate the present value of the loan payments. The formula to calculate the present value is:

Present Value = Payment 1 / (1 + Interest Rate)Time 1 + Payment 2 / (1 + Interest Rate)Time 2 + ... + Payment n / (1 + Interest Rate)Time n

Using the given information, we can calculate the present value as follows:

PV = 1695 / (1 + 4.3)8 + 4690 / (1 + 4.3)5 + 704 / (1 + 4.3)-5

Calculating the above expression will give us the size of the replacement payment.