Videos: Equations of Value

What is an Equation of Value?

Today, you take out a $5000 loan at 10% simple interest, which is to be repaid with two equal payments at the end of the first year and at the end of the second year.  Find the size of the payments (using today as your focal date).

You must repay a debt of $6000 dollars at 6% simple borrowed today.  The finance company has agreed to allow you to make three yearly payments with the first payment in one year.  The first two payments will be equal and the third payment will be $500 more than the first two payments.  Find the size of the payments using 3 years from now as your focal date.