The Scheduled Payment Stream Consists of $5,000 Due Today and $10,000

question 238

Short Answer

The scheduled payment stream consists of $5,000 due today and $10,000 due in five years. It is proposed to replace this stream by an economically equivalent stream comprised of three equal payments due one, three, and five years from now. Determine the size of each payment if money is worth 5% compounded annually.

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Definitions:

Articulations

The point of contact between bones, or bones and cartilage, which allows for movement and flexibility in the skeletal system.

Ligaments

are bands of tough, elastic connective tissue that connect bones to other bones, stabilizing joints and supporting the body's structure.

Articulation

The physical joint between two bones, allowing for varying degrees of movement.

Condyle

A rounded protuberance at the end of some bones, forming an articulation with another bone.