Question: For the accident of Gulf of Mexico oil spill, British Petroleum (BP) took the following steps to pay for the serious consequences: (i = 6% per quarter)
Pay $3 billion at the end of the third quarter of 2010 and another $2 billion at the end of the fourth quarter of 2010. Make payments of $1.25 billion each quarter thereafter until a total of $20 billion.
a. What is the equivalent present value at the beginning of the third quarter of 2010?
b. What is the equivalent present value at the beginning of the first quarter of 2010?
c. What is the equivalent future value at the end of 2013?