Assume that somebody has to pay £2000 in three years’ time and £3000 in seven years’ time. They want to pay off both debts by a single payment in six years’ time. Assuming an interest rate of 8% p.a., how much do they have to pay?

Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter9: Current Liabilities, Contingencies, And The Time Value Of Money
Section: Chapter Questions
Problem 9.12E
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Assume that somebody has to pay £2000 in three years’ time and £3000 in seven years’ time. They want to pay off both debts by a single payment in six years’ time. Assuming an interest rate of 8% p.a., how much do they have to pay?
3. * Assuming 365 days in a financial year answer the following questions:
(a) Find the discounted value of $500 due in 82 days at 9% (compound) interest.
(b) Find the discounted value of $500 due in 82 days at a (compound) discount rate of 9%.
(c) Find the discounted value of $500 due in 82 days at 9% simple interest.
(d) Find the discounted value of $500 due in 82 days at 9% commercial discount.
Transcribed Image Text:3. * Assuming 365 days in a financial year answer the following questions: (a) Find the discounted value of $500 due in 82 days at 9% (compound) interest. (b) Find the discounted value of $500 due in 82 days at a (compound) discount rate of 9%. (c) Find the discounted value of $500 due in 82 days at 9% simple interest. (d) Find the discounted value of $500 due in 82 days at 9% commercial discount.
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