A Contract Was Signed Eight Months Ago Requiring the Payment

question 177

Multiple Choice

A contract was signed eight months ago requiring the payment of $13,000 plus interest at 8% after one year. What two equal payments made today and four months from today are equivalent to the original contract? Assume that money is now worth 5%. Use four months from today as the focal date.

• A) $7,020.00
• B) $7,070.11
• C) $6,446.28
• D) $13,809.84
• E) $7,078.02

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Definitions:

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