Edward Lewis borrowed some money from his friend and promised to repay him $1,200, $1,320, $1,500,...

Question

Question

Edward Lewis borrowed some money from his friend and promised to repay him $1,200, $1,320, $1,500, $1,610, and $1,610 over th

Answer 1

Answer #1

Present value=Cash flows*Present value of discounting factor(rate%,time period)

=1200/1.1+1320/1.1^2+1500/1.1^3+1610/1.1^4+1610/1.1^5

which is equal to

=$5408.13(Approx).

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Answer 2

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