2.50. Armes Corporation has the opportunity to receive $20,000 right now, or, $3254.91 per year for the next ten years. The first payment will be available after one year. For what rate of interest would the two options be of equal value?

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter19: Lease And Intermediate-term Financing
Section: Chapter Questions
Problem 14P
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2.50. Armes Corporation has the opportunity to receive $20,000 right now, or, $3254.91
per year for the next ten years. The first payment will be available after one year. For
what rate of interest would the two options be of equal value?
Transcribed Image Text:2.50. Armes Corporation has the opportunity to receive $20,000 right now, or, $3254.91 per year for the next ten years. The first payment will be available after one year. For what rate of interest would the two options be of equal value?
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