Question
Asked Feb 4, 2019
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What is the equal-payment series for 10 years that is equivalent to a payment series starting with $30,000 at the end of the first year and decreasing by $3,000 each year over 10 years? Interest is 8% compounded annually.

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Expert Answer

Step 1

The first step is to compute the total present value of cashflows for 10 years which is decreasing each year by $ 3000.

The same has been computed by applying the present value factors for each respective cashflows and the sum of those present values is taken.

After the to...

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