Question

2. A total debt of $4,000 due three years from now and $5,000 due 50 months from now is to be repaid by three payments as follows: (i) a first payment is made 8 months from now; 42 months (ii) a second payment of $3,000 is made two years from now; 11 (iii) a third payment (which is 25% less than the first payment) is made 3 years from now. Interest is 2.4% APR compounding monthly. Find the payments in (i) and (iii) rounded-up to the nearest dollar. A complete money-time diagram and equation of value are required for full points. (11 points)