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Calculate the balance payment offered in option

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1) When Pacific Inc. bid for a project with the government, the company was offered the following two payment options:

Option (A): A payment of $715,000 at the end of 4 years, which is the scheduled completion time for the project.

Option (B): $225,000 paid upfront at the beginning of the project and the balance payment in 4 years.

If the two payments are financially equivalent and the interest rate is 3.24% compounded quarterly, calculate the balance payment offered in Option(B).

Round to the nearest cent!

2) Sophie would like to accumulate $370,000 for her retirement in 10 years. If she is promised a rate of 3.78% compounded monthly by her local bank, how much should she invest today?

Round to the nearest cent

Reference no: EM132523372

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