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Determine at what periodic interest rate a $2,000 cash receipt occurring at the beginning of year 1 is equivalent to four cash disbursements: a $575
Determine at what periodic interest rate a $2,000 cash receipt occurring at the beginning of year 1 is equivalent to four cash disbursements: a $575 cash disbursement occurring at the end of year 1, a $600 cash disbursement occurring at the end of year 2, a $625 cash disbursement occurring at the end of year 3, and a $650 cash disbursement occurring at the end of year 4. The periodic interest rate is 4 compounded annually. 5 5 Interest Rate (%) 3 Period Amount PV What If Analysis: "Goal Seek" 1 1 2 o nm + 2 3 3 1 4 Total 0.00 5 6 7 3 1 2
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