two math questions . John is 30 years old. He will receive two payments of $1500
ID: 2261253 • Letter: T
Question
two math questions .
John is 30 years old. He will receive two payments of $1500 each. The first payment will be an unknown number of years in the future. The second payment will be 7 years after the first payment...
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John is 35 years old. He will recieve 2 payments of $ 1500 each. The first payment will be an unknown number of years in the future. The second payment will be 7 years after the first payment. At an effective annual rate of interest of 6 %, the present value of the two payments is $ 1871. Determine at what age John will receive the second payment.(Round to the nearest integer.) John's age at time of second payment-44 years?Explanation / Answer
a)
John is 35 years now, Let he will receive his first payment after n years and secon payment after (n+7) years from now.
Present value of future payments = 1500/(1.06)^n +1500/(1.06)^(n+7)
1871=1500/(1.06)^n +1500/(1.06)^(n+7)
Solving for n
n4.95721
n= 5 years.
John at the time of second parment will be (35+5+7) =47 years.
b)
John is 30years now, Let he will receive his first payment after n years and secon payment after (n+7) years from now.
Present value of future payments = 1500/(1.06)^n +1500/(1.06)^(n+7)
1871=1500/(1.06)^n +1500/(1.06)^(n+7)
Solving for n
n4.95721
n= 5 years.
John at the time of second parment will be (30+5+7) =42 years.
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