Calculate the present worth of a geometric gradi­ent series with a cash flow of $35,000 in year 1 and increases of 5% each year through year 6. The in­terest rate is 10% per year.

What will be an ideal response?


Pg = 35,000{1 – [(1 + 0.05)/(1 + 0.10)]?}/(0.10 – 0.05)
= $170,486

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