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Question #2 (25 Points): a) Calculate the present equivalent value (P) for the following cash flow profile. (15 points). $4,500 $4,500 $4,000 $3,500 $3,000 $2,500
Question #2 (25 Points): a) Calculate the present equivalent value (P) for the following cash flow profile. (15 points). $4,500 $4,500 $4,000 $3,500 $3,000 $2,500 $2,000 i= 10% b) Maria deposits $3000 in a savings account that pays 9% compounded annually. 2 years after the deposit (at the end of year 2), the interest rate increases to 10% compounded annually. A second deposit of $4000 is made immediately once the interest rate changes to 10%. How much will be in the fund 7 years after the second deposit? (10 points)
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