Consider a series of cash flow for a loan financing depicted by a CFD given in Figure Q2(a). With the appropriate interest rates indicated and referring to the Table of Interest. a) Construct the equation and solve the present worth equivalent. b) Construct the equation and solve the series equivalents for the cash flow series. 10%

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Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Consider a series of cash flow for a loan financing depicted by a CFD given in Figure Q2(a). With the appropriate interest rates indicated and referring to the Table of Interest. a) Construct the equation and solve the present worth equivalent. b) Construct the equation and solve the series equivalents for the cash flow series.

10%

300
200
200
(+)
1
2
3 4 5
(-)
200
Figure Q2(a) Cash Flow Diagram with varible interest rate.
Transcribed Image Text:300 200 200 (+) 1 2 3 4 5 (-) 200 Figure Q2(a) Cash Flow Diagram with varible interest rate.
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