Find the value of X so that the two cash flows below are equivalent for an interest rate of 8.25%

Question

Question

i=8.25% per period

Answer 1

Answer #1

Present value of first cash flows :-

Two cash flows are equivalent. Therefore :-

1,032 = (X x 0.85338) + (X x 0.72826) + (-400 x 0.67276) + (X x 0.62149)

1,032 = 2.20313X - 269.104

X = $590.57

Answer 2

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