What is the present equivalent of these payments

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Reference no: EM131911624

Payments of $10,000 each are to be repaid monthly at the end of each month. The monthly interest rate is 2%.

a. What is the present equivalent (i.e., P0) of these payments?

b. Repeat Part (a) when the payments are made at the beginning of the month.

Note that the present equivalent will be at the same time as the first monthly payment.

c. Explain why the present equivalent amounts in Parts (a) and (b) are different.

Reference no: EM131911624

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