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Q2 Fall 1108
Q2 Fall 1108
Q2 Fall 1108
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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
60 50
64
Cash Flow
40 30 20 10 0
32 16 2
0
32 16 8 4 2
10
8
2 4 6
Period
O By One
1. Write an equation, in factor notation, that describes the present worth of this cash ow sequence.
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 118.688091593111