Score: 0 of 1 pt 4 of 8 (8 complete) HW Score: 87.5%, 7 of 8 pts Problem 4-95 (a

Question

Score: 0 of 1 pt 4 of 8 (8 complete) HW Score: 87.5%, 7 of 8 pts Problem 4-95 (algorithmic) Question Help A cash flow series is increasing geometrically at the rate of 9% per year. The initial payment at EOY 1 is S5.500, with increasing annual payments ending at EOY 20. The interest rate is 13% compounded annually for the first six years and 4% compounded annually for the remaining 14 years. Find the present amount that is equivalent to this cash flow. Click the icon to view the interest and annuity table or discrete compounding when the MARR is 4% per year. The present amount that is equivalent to this cash flow series is s .(Round to the nearest dollar.) Enter your answer in the answer box and then click Check Answer. MacBook Ai

Explanation / Answer

Present value=5500/1.13+5500*1.09/1.13^2+5500*1.09^2/1.13^3+..5500*1.09^5/1.13^6+5500*1.09^6/(1.13^6*1.04)....5500*1.09^19/(1.13^6*1.04^14)

=5500/(1.13-1.09)*(1-(1.09/1.13)^6)+5500*1.09^6/1.13^5*(1-(1.04/1.13)^14)/(1.13-1.04)

=64960.85068

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