Question

Some investment gives as estimated income of $ 5,000.00 the first bimester. These revenues, as of...

Some investment gives as estimated income of $ 5,000.00 the first bimester. These revenues, as of the second bimester, would decrease by $ 50.00 every two months. What is the initial amount of this investment, if you pay a rate of 6% profitability, and its life span is 15 years? Draw flow diagram

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Answer #1

Income in first period=R=$5000

Gradient=G=$50

Number of periods=15*6=90 bimesters

Rate of interest=i=6%/6=1% per bimester

Initial amount of investment, P=5000*(P/A,1%.90)+50*(P/G,1%.90)

We know that

Initial amount of investment, P=5000*59.160881+50*2240.567482=$407,832.78

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