Find the present worth of $2,500 deposits in year 1 through 10 if the interest rate is 8% per year for the first two years and 12% per year thereafter. a) Draw cash flow diagrams b) Find the present worth. Please write formula and show your solution step by step.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Find the present worth of $2,500 deposits in year 1 through 10
if the interest rate is 8% per year for the first two years and 12%
per year thereafter.
a) Draw cash flow diagrams
b) Find the present worth. Please write formula and show
your solution step by step.
Transcribed Image Text:Find the present worth of $2,500 deposits in year 1 through 10 if the interest rate is 8% per year for the first two years and 12% per year thereafter. a) Draw cash flow diagrams b) Find the present worth. Please write formula and show your solution step by step.
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