Question

Three payments are scheduled as follows: $1,700 is due today, $1,400 is due in five months, and $2,500 is due in eight months. The three payments are to be replaced by a single equivalent payment due ten months from now.

What should the payment be if money is worth 6.9%? Use ten months from now as the focal date.

Answer 1

first payment = 1700 + 1700(.069)(10/12) = ..
2nd payment = 1400 + 1400(.069)(5/12) = ..
3rd payment = 2500 + 2500(.069)(2/12) = ...

add them up