For the cash flow diagram shown, determine the value of G that will make the present worth in year 0 equal to $2500 at an interest rate of 10% per year.
What will be an ideal response?
Find present worth of gradient in year 1, move back to year 0, and then set equal to $2500
P 1 = 900(P/A,10%,4) – G(P/G,10%,4)
= 900(3.1699) – G(4.3781)
= 2852.91 – 4.3781G
P 0 = (2852.91 – 4.3781G)(P/F,10%,1)
= (2852.91 – 4.3781G)(0.9091)
= 2593.58 – 3.9801G
2500 = 2593.58 – 3.9801G
-93.58 = -3.9801G
G = $23.51
You might also like to view...
Common flue and chimney sizes are based on the ____.
A. diagonal size of the fireplace opening B. volume of the fireplace opening C. area of the fireplace opening D. height of the fireplace opening
The fact that water is contained makes it easier to rid a pond or lake of unwanted species of fish, such
as carp.
Indicate whether the statement is true or false.Trout, Atlantic salmon, and striped bass are known as ____________________ fish
Fill in the blank(s) with correct word
What are shell variables?
What will be an ideal response?