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Q2 Fall 1101
Q2 Fall 1101
http://www.youtube.com/watch?v=UIGbOW0odxA
PASS Name:
NO PASS
F = P (1 + i)N P =A P = P =
(1+i)N 1 i(1+i)N (1+i)N iN 1 G i2 (1+i)N 1(1+g)N (1+i)N A1 ig
or P = A1
N 1+i
15
16 13 10 8 7 4 1
4 6 8 10
Cash Flow
10
4 2 0
0
0
2
Period
1. Write an equation, in factor notation, that describes the present worth of this cash ow sequence.
O By One
2. Write an equivelent equation in factor notation, i.e., decompose the cash ow dierently.
3. Calculate the present worth of this series when the interest rate is 10.00%?
Answer Key
1. Answer: See Video 2. Answer: See Video 3. Answer: The present worth is 34.4311166135005