Question
At an effective annual interest rate of , , the following two sets of payments have the same present value: (i) A payment of 64
At an effective annual interest rate of 
, 
, the following two sets of payments have the same present value:
(i) A payment of 64 immediately and another payment of 64 at the end of 1 year
(ii) A payment of 125 at the end of 3 years and another payment of 125 at the end of four years
Compute the effective rate of discount 
equivalent to 
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Microeconomics Theory And Applications
Authors: Edgar K. Browning, Mark A. Zupan
13th Edition
1119368928, 9781119368922
