Focal Date Question

[mroberts]

Question 4*
Equation of value: A person owes $ 10,000 due in one year and $ 30,000 due in 4 years. He or she agrees to pay $ 20,000 today and the remainder in 2 years. What is the payment in 2 years if the interest rate is 5% compounded semi-annually?
Hint: Set up the equation of value with a focal date of 2 years. Does the focal date matter?

Hope you can see the image. This is my attempt for the question.
Can you check my working?
Regards

Marshall

 

[stapel]

Question 4*
Equation of value: A person owes $ 10,000 due in one year and $ 30,000 due in 4 years. He or she agrees to pay $ 20,000 today and the remainder in 2 years. What is the payment in 2 years if the interest rate is 5% compounded semi-annually?
Hint: Set up the equation of value with a focal date of 2 years. Does the focal date matter?

Hope you can see the image.

I can't see all of it. In particular, I can't read the exponents.

This is my attempt for the question.

Which part is the "this" which represents your work?

Thank you!

 

[jonah2.0]

Beer soaked ramblings follow.

Question 4*
Equation of value: A person owes $ 10,000 due in one year and $ 30,000 due in 4 years. He or she agrees to pay $ 20,000 today and the remainder in 2 years. What is the payment in 2 years if the interest rate is 5% compounded semi-annually?
Hint: Set up the equation of value with a focal date of 2 years. Does the focal date matter?

Hope you can see the image. This is my attempt for the question.
Can you check my working?
Regards

Marshall

Your answer looks correct to me but your equation of value irritates me somehow.
As far as the focal date is concerned, since it is a compound interest problem, it really doesn't matter. You'll get the same answer no matter which focal date you choose. Try it.
With the end of two years as the focal date, you'd have
10,000(1.025)^(1*2)+30,000(1.025)^(-2*2)=20,000(1.025)^(2*2)+x

 

[mroberts]

Stapel
The text shaded in grey is the question, the remainder is my answer.