A $4,000 Obligation Is to Be Repaid by Three Payments

Multiple Choice

A $4,000 obligation is to be repaid by three payments. The first payment is now, the second is 18 months from now, and the final payment is in 24 months. In addition, the second payment will be half the amount of the first, while the third payment will be twice as much as the first. Interest is 4.8% compounded quarterly. Using the financial functions on the calculator, determine the size of each payment.

A) Payment #1 = $1218.24; Payment #2 = $609.12; Payment #3 = $2436.48
B) Payment #1 = $500; Payment #2 = $250; Payment #3 = $1,000
C) Payment #1 = $2520.50; Payment #2 = $1,260.25; Payment #3 = $5,041
D) Payment #1 = $3,300.75; Payment #2 = $1,650.38; Payment #3 = $6,601.50
E) Payment #1 = $875.50; Payment #2 = $437.75; Payment #3 = $1,751