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majarm majarm
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6 years ago
A $17 200 debt will accumulate for six years at 11.6% compounded semi-annually. For how much will the debt sell four years after it was incurred if the buyer of the debt charges 9% compounded quarterly?
Textbook 
Contemporary Business Mathematics with Canadian Applications

Contemporary Business Mathematics with Canadian Applications


Edition: 11th
Authors:
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wrote...
6 years ago
Maturity value: PV = 17200.00; i = 11.6%/2 = 5.8%; n = 12
FV = 17200.00(1.058)12 = 17200.00(1.9671071) = $33 834.24
Proceeds:   i = 0.09/4 = 0.0225 N = 2 × 4 = 8
PV = 33834.24(1.0225)-8 = 33834.24(.8369383) = $28 317.17
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