What final payment will be necessary at the end of years

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Q1. What sum of money due on October 1, 2027 is equivalent to $7000 due on January 1, 2004 if interest rates were 6.9%/year compounded monthly before January 1, 2010, changed to 9.4%/year compounded monthly from January 1, 2010 to January 1, 2020, and stood at 9.8%/year compounded monthly thereafter?

Q2. A consumer buys goods worth $840. She pays $84 down and will pay $420 at the end of 1 year. If the store charges interest on the unpaid balance at a rate of 3.9%/year compounded monthly during the first two years and at a rate of 8.6%/year compounded monthly thereafter, what final payment will be necessary at the end of 3 years?

Reference no: EM132956890

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