A payment of \( \$ 2,760 \) is due in 60 days and another payment of \( \$ 2,770 \) is due in 175 days. Calculate the single equivalent payment to be made in 80 days to settle the two payments if mone
To find the single equivalent payment, we need to calculate the present value of each payment and then add them together.
The present value of the first payment of $2,760 due in 60 days can be calculated using the formula:
PV = FV / (1 + r)^n
where PV is the present value, FV is the future value, r is the interest rate per period, and n is the number of periods.
Assuming an annual interest rate of 5%, we can convert it to a daily interest rate by dividing by 365:
r = 5% / 365 = 0.0137 (rounded to four decimal places)
Plugging in the values, we get:
PV1 = $2,760 / (1 + 0.0137)^60
PV1 ≈ $2,664.30
The present value of the second payment of $2,770 due in 175 days can be calculated using the same formula:
PV2 = $2,770 / (1 + 0.0137)^175
PV2 ≈ $2,541.27
Now, we can find the single equivalent payment by adding the present values:
Single Equivalent Payment = PV1 + PV2
Single Equivalent Payment ≈ $2,664.30 + $2,541.27
Single Equivalent Payment ≈ $5,205.57
Therefore, the single equivalent payment to be made in 80 days to settle the two payments is approximately $5,205.57.
In order to calculate the single equivalent payment, we need to consider the time value of money and discount the future payments to their present values.
To calculate the present value of each future payment, we will need the interest or discount rate. Please provide the interest or discount rate to proceed with the calculation.