Answer= equivalent single payment two years from now = $ 3897.946
Working notes for the above answer is as under
We have been provided with the information as follow
| Time | Amount Due |
| 6 months | 1000 |
| 18 months | 1200 |
| 30 moths | 1500 |
We need to calculate What is the equivalent single payment two years from now if money is worth 9.6% compounded quarterly
So first we calculate equivalent money recived till year two
| months | Value beginig | Add interest quarterly @9.6 for year |
Interest | Ending value |
| 6 | 1000 | 2.40% | 24 | 1024 |
| 9 | 1024 | 2.40% | 24.576 | 1048.576 |
| 12 | 1048.576 | 2.40% | 25.16582 | 1073.742 |
| 15 | 1073.741824 | 2.40% | 25.7698 | 1099.512 |
| 18 | 1099.51+2000 | 2.40% | 55.18828 | 2354.7 |
| 21 | 2354.699907 | 2.40% | 56.5128 | 2411.213 |
| 24 | 2411.212705 | 2.40% | 57.8691 | 2469.082 |
now we discount the 30th month paymetn amount till 24th month so that we can find equivalent amount at the 24th month end i.e year 2nd end
| months | Ending value | Dicounted with interest quarterly @9.6 for year |
Interest | Value beginig |
| 30 | 1500 | 2.40% | 36 | 1464 |
| 27 | 1464 | 2.40% | 35.136 | 1428.864 |
| 24 | 1428.864 |
So total equivalent single payment two years from now
= $ 2469.082+ 1428.864
= $ 3897.946
