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(F |P, i, N ) (P |A, i, N ) (P |G, i, N ) (P |A1 , g, i, N )
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 i−g
or P = A1
if : i = g Not Factor Note
Consider the following cash ﬂow diagram.
15 10 5 0 0.0 2.5
10 5 2.5 184.108.40.206
10 5 2.5
Oﬀ By 1. Write an equation, in factor notation, that describes the present worth of this cash One
2. Write an equivelent equation in factor notation, i.e., decompose the cash ﬂow diﬀerently.
3. Calculate the present worth of this series when the interest rate is 10.00%?
1. Answer: One of many possible answers is: 1.25 1 ,g=−50%,i,5) P = 20(P |A(1+i)−1 + (1+i)5 + 1.25(P |A1 ,g=100%,i,5) (1+i)5 2. Answer: You just need to create another variation 3. Answer: The present worth is 53.00