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Scheduled payments of ?$1225 due two years ago and ?$1162 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 seven years.
Problem 1: Determine the size of the two replacement payments if interest is 7.8% compounded annually and the focal date is one year from now.
Problem 2: What is the size of 2 equal payments?
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