Two Debt Payments, the First in the Amount of $1600

question 2

Essay

Two debt payments, the first in the amount of $1600.00 due today, and the second in the amount of $7200.00 due in 15 months with interest at 9.6% p.a. compounded quarterly, are to be settled by a payment of $3400.00 nine months from now and a final payment in 21 months. Determine the size of the final payment if the money is worth 12.12% p.a. compounded monthly.

---

Definitions:

Categorical Variable

A variable that represents groups or categories, which are not numerical.

Regression Equation

An equation that describes the average relationship between a dependent variable and one or more independent variables.

Coefficient Of Determination

A metric quantifying the amount of variation in a dependent variable accounted for by one or more independent variables within a regression model.

Interaction

In statistics and research, it refers to a situation where the effect of one independent variable on a dependent variable changes depending on the level of another independent variable.