A Payment Stream Consists of Three Payments: $1000 Today, $1500

question 171

Short Answer

A payment stream consists of three payments: $1000 today, $1500 in 70 days, and $2000 in 210 days. What single payment, 60 days from now, is economically equivalent to the payment stream if money can be invested at a rate of 8.5%?

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Definitions:

Circumduction

A circular movement of a limb or eye that combines flexion, extension, abduction, and adduction in a sequential manner.

Flexion and Extension

Movements that decrease (flexion) or increase (extension) the angle between the bones of a joint.

Inversion

The action of inverting something or the state of being inverted, such as turning the sole of the foot inward.

Eversion

The movement of turning a body part outward or inside out, often referred to in the context of ankle movements.