Find the value of x that makes the equivalent annual worth in years 1 through 10 equal to $800 per year. Use an interest rate of 10% per year.The cash flows in year 0 and year 10 has an unknown value x, and 1 through 9 has an annual worth of $800.The value of x is determined to be $.....

Question
Asked Nov 7, 2019

Find the value of x that makes the equivalent annual worth in years 1 through 10 equal to $800 per year. Use an interest rate of 10% per year.

The cash flows in year 0 and year 10 has an unknown value x, and 1 through 9 has an annual worth of $800.

The value of is determined to be $.....

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Expert Answer

Step 1

Calculation of values of x and 2x:

Answer:

The value of x is 4,915.75

Step 2

Calculation of future val...

(1+i)" -1
Future value A
(1+0.10)-
=$800
1
0.10
$12,750
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(1+i)" -1 Future value A (1+0.10)- =$800 1 0.10 $12,750

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