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You make a payment at the end of year 1 for $300. You receive $500 at the end of year 3, $1,000 at the
You make a payment at the end of year 1 for $300. You receive $500 at the end of year 3, $1,000 at the end of year 4, and $1,500 at the end of year 5. No other payments or receipts occur. Assume i is 10% annual rate compounded annually. Part (a) Draw the appropriate cash flow diagram. Part (b) Using factor notation, what would be the Present Value of this cash flow? DO NOT SOLVE, but do fill in appropriate i and N values in the notation. Use either a (P/G,i,N) or (A/G,i,N) term (whichever is appropriate) as part of your solution (with i and N filled in). Part (c) Solve for the Present Value of the cash flows. If you are unable or uncomfortable using the notation you provided in part (b), state such and solve using other factors.
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