Question: Jungle Jim owes 3 debts: $500 due in 1 year plus interest at 6% compounded semi-annually, $2000 due in 2 years, $1000 due in 3 years plus interest at 5% compounded monthly.

He wishes to discharge these debts by paying $500 now and 2 equal but unknown payments in 1 and 2 years respectively. Find the size of the equal payments if money is, at present, worth 12% compounded quarterly. Use a focal date of two years. (16 marks)