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3 Part 3 Show that when the cashflow F; = F is constant and the discount rate is r, then F F (1 + r)

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3 Part 3 Show that when the cashflow F; = F is constant and the discount rate is r, then F F (1 + r) Hint: start by writing (1 1 (1 + r)? t=1 F P = (1+r) + (1+r) +...+(1+r)T and use the fact that you can multiply the left and right hand side of this expression by (1+r). 2

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