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A Contract Was Signed Eight Months Ago Requiring the Payment

Question 26

Multiple Choice

A contract was signed eight months ago requiring the payment of $13,000 plus interest at 8% after one year. What two equal payments made today and four months from today are equivalent to the original contract? Assume that money is now worth 5%. Use four months from today as the focal date.


A) $7020.00
B) $6961.98
C) $6446.28
D) $13,809.84
E) $7078.02

Correct Answer:

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