Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Present Value
Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. …
Question

What is the amount $R that makes the two cash-flow diagrams below equivalent? The interest rate is 10% compounded continuously. 

500 R R R 500 500 500500 0 1 3 4 5 6 2 3 4 5 500 EOY 500 ΕΟΥ 1,000 +2
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Transcribed Image Text:500 R R R 500 500 500500 0 1 3 4 5 6 2 3 4 5 500 EOY 500 ΕΟΥ 1,000 +2
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