Scheduled payments of $721 due two years ago and $464 due in four years are to be replaced by two equal payments. The first replacement payment is due in one year and the second payment is due in nine years. Determine the size of the two replacement payments if interest is 2.9% compounded quarterly and the focal date is one year from now.

Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter12: Current Liabilities
Section: Chapter Questions
Problem 5Q: If Bergen Air Systems takes out a $100,000 loan, with eight equal principal payments due over the...
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Scheduled payments of $721 due two years ago and $464 due in four years are to be replaced by two equal payments. The first replacement payment is due in one year and the second payment is due in nine years. Determine the size of the two replacement payments if interest is 2.9% compounded quarterly and the focal date is one year from now.

 

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