Two Payments of $1,000 Now and $3,000 in 6 Months

question 259

Multiple Choice

Two payments of $1,000 now and $3,000 in 6 months are to be replaced by $2,500 in 4 months and another in 9 months. If the rate of interest is 6.3% annually, determine the value of the final payment in 9 months if the focal point is in 9 months.

• A) $1,532.67
• B) $1,528.875
• C) $1,502.65
• D) $1,498.13
• E) $1,486.86

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Definitions:

Recordkeeping

The maintenance of records, including the processes of creating, storing, and managing documents.

Technology

The application of scientific knowledge for practical purposes, especially in industry, which includes machinery, equipment, methods, and processes.

Cost-benefit Constraint

A principle that considers whether the cost of implementing a decision outweighs the benefits derived from it.

Disclosure

The process of making essential financial information known to shareholders, regulators, and the public.