Year 0-4: $2000 at EOY 0 and decreases $200 each year (cash outflow) Year 6-10: $C at EOY 6 and increases by $C each year (Cash inflow) a) Find C so that the cash outflows and inflows are equivalent. Use i = 7%/year compounded monthly. b) Suppose that the interest changes to i = 9% /year compounded annually after EOY 4. Find C.
Year 0-4: $2000 at EOY 0 and decreases $200 each year (cash outflow) Year 6-10: $C at EOY 6 and increases by $C each year (Cash inflow) a) Find C so that the cash outflows and inflows are equivalent. Use i = 7%/year compounded monthly. b) Suppose that the interest changes to i = 9% /year compounded annually after EOY 4. Find C.
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
Section: Chapter Questions
Problem 1PS
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Year 0-4: $2000 at EOY 0 and decreases $200 each year (
a) Find C so that the cash outflows and inflows are equivalent. Use i = 7%/year compounded monthly.
b) Suppose that the interest changes to i = 9% /year compounded annually after EOY 4. Find C.
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