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(b) Suppose Peter puts an amount of P = P, + P2 into the bank as time deposit. The interest rate to the deposit is
(b) Suppose Peter puts an amount of P = P, + P2 into the bank as time deposit. The interest rate to the deposit is r% per year. After one year, Peter will take out P1(1+r%) out of the bank. After another year, Peter will take out the remaining amount from the bank. When the interest rate used for calculating the present value is also r%, show that the net present value for putting money into the bank is zero.(b) Suppose Peter puts an amount of P = P, + P2 into the bank as time deposit. The interest rate to the deposit is r% per year. After one year, Peter will take out P1(1+r%) out of the bank. After another year, Peter will take out the remaining amount from the bank. When the interest rate used for calculating the present value is also r%, show that the net present value for putting money into the bank is zero
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