Two Payments of $3,000 Each Are Due Today and Five

question 85

Short Answer

Two payments of $3,000 each are due today and five years from today. The creditor has agreed to accept three equal payments due one, three, and five years from now if the payments are based on the recognition that money can earn 7.5% compounded monthly. What payments will the creditor accept?

---

Definitions:

Comparative Negligence

A legal doctrine under which a plaintiff's damages are reduced by a percentage equal to their degree of fault in causing their injury.

Strict Liability

A legal doctrine holding individuals or entities responsible for damages or injuries caused by their actions or products, regardless of negligence or intent.

Contributory Negligence

A legal doctrine that can reduce the claimant's ability to recover damages if they are found partly at fault for the incident or harm.

Reasonable Person Standard

A legal benchmark used to determine how an average person would responsibly act in certain circumstances.