What is the equivalent present value

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Reference no: EM131056175

You are loaning a car to someone who will pay in an unusual schedule as follows:

He takes home the car today. No payments are required until the end of the fifth month, when he pays $680. Payments of $680 are then due every month until (and including) the end of month 13. After month 13, no payments are required until the end of month 17, when payment of $680 is again due. Payments then decrease by $50 every month until (and including) the end of month 23. The annual interest rate is 6%, compounded monthly.

What is the equivalent present value today of all payments in the propsed schedule?

Reference no: EM131056175

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