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Calculate the equivalent value of the payment

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Question - Liz was supposed to make a payment of $2,750 in 2 years and another payment for $1,900 in 6 years to Maroon Inc. as part of a payment plan. Instead, she is trying to reach an agreement with the company where she would settle both payments in 4 years. Assume that money is worth 4.82% compounded semi-annually.

a. Calculate the equivalent value of the $2,750 payment and the $1,900 payment today.

b. Calculate the size of the payment required in 4 years to settle the amount.

Reference no: EM132607932

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