Problem 7 - Unknown Time & Unknown Interest Rate At what effective annual rate of interest i i would the present value of $3000 at the end of 3 years plus $5000 at the end of 6 years be equal to $6139.42. i = _____%
Added by Ines D.
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For the first cash flow of $3000 at the end of 3 years, we have: PV1 = 3000 / (1 + i)^3 For the second cash flow of $5000 at the end of 6 years, we have: PV2 = 5000 / (1 + i)^6 The total present value of the two cash flows is the sum of PV1 and PV2: PV1 + Show more…
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