A $2000 bill can be paid today with a 5% discount or with four monthly payments with no discount. What would be the return on your money if you paid it all today?
(The answer will be posted with the new calculator problem in 2 weeks. Or if you can’t wait that long, you can go to http://www.facebook.com/pages/Gary-Johnston-Seminars/111368472221424 for the answer.)
Answer to 09/24/2012 problem:
(N=96,I=8,PMT=0,FV=25,000) PV= -13,210.34
(N=180,I=8,PMT=0,FV=25,000) PV= -7,559.90
$50,000.00 + $13,210.34 + $7,559.90 = $70,770.24