What Single Payment 1 Year from Now Would Be Equivalent

question 176

Short Answer

What single payment 1 year from now would be equivalent to $2500 due in 3 months, and another $2,500 due in 2 years? Money is worth 7% compounded quarterly.

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Definitions:

Quarterly

Pertaining to a period of three months or a quarter of a year, often used in finance to denote regular intervals for reporting or payment.

Accumulated Depreciation

The total amount of depreciation expense that has been reported in accounting periods up to the current date for an asset, reducing its book value.

Depreciation Expense

The systematic allocation of the cost of a tangible asset over its useful life, reflecting wear and tear, obsolescence, or age.

Book Value

The net value of a company's assets found on its balance sheet, calculated as total assets minus intangible assets (patents, copyrights) and liabilities.