Question
What is the economic value today of each of the following payment streams if money can earn 7.5%?(Note that the two streams have the same total nominal value.)
a. $1000, $3000, and $2000 due in one, three, and five months, respectively.
b. Two $3000 payments due two and four months from now.
I'm not really sure where to start or how to tackle this problem.
a. $1000, $3000, and $2000 due in one, three, and five months, respectively.
b. Two $3000 payments due two and four months from now.
I'm not really sure where to start or how to tackle this problem.