Homework Answers
n=14
Growth rate,f=8%
r=15%
A=$600
PW of geometric gradient=A*(1-(1+g)^n/(1+r)^n)/(r-g)
=600*(1-(1+8%)^14/(1+15%)^14)/(15%-8%)
=600*(1-(2.9372/7.0757)/7%
=600*(1-0.4151)/0.07
=600*0.5849/0.07
=$5013.43
Hemce PW=$5013
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