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Given the following cash flows and an interest rate of 5%: t Rt vtRt tvtRt 1 500 476 476 2 600 544 1,088 3 700
Given the following cash flows and an interest rate of 5%:
t | Rt | vtRt | tvtRt |
1 | 500 | 476 | 476 |
2 | 600 | 544 | 1,088 |
3 | 700 | 605 | 1,815 |
4 | 800 | 658 | 2,632 |
5 | 900 | 705 | 3,525 |
6 | 700 | 522 | 3,132 |
7 | 500 | 355 | 2,485 |
8 | 300 | 203 | 1,624 |
9 | 200 | 129 | 1,161 |
10 | 100 | 61 | 610 |
Sum | 5,300 | 4,258 | 18,548 |
Find the modified duration.
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