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Consider a series of end-of-period CFs spanning 2042-2051, which decrease at a 0.6% rate each period....

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Finance

Consider a series of end-of-period CFs spanning 2042-2051, whichdecrease at a 0.6% rate each period. The amount of the first CF inthe series is $140. The interest rate is 2.1%. What is theequivalent value of this series at the end of 2051?

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3.9 Ratings (599 Votes)
The amount of the First CF in the series is 140 and the interest rate initially is 21 which is getting decreased by 06 with each period passes Assuming the given data is for the starting period so calculating the equivalent value for the period ending with 2042 Step 1 21 06100 2094 as 06 is getting deducted in each period Step 2 1402094100 29316 Equivalent value ending first period will be 14029316 14293 Calculating Equivalent value for the period ending 2043 Step No 1 will be same because    See Answer
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Transcribed Image Text

Consider a series of end-of-period CFs spanning 2042-2051, whichdecrease at a 0.6% rate each period. The amount of the first CF inthe series is $140. The interest rate is 2.1%. What is theequivalent value of this series at the end of 2051?

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