1. Given the following cash flow: Year End-of-year payment 1400 1500 1650 1300 1 2 $1400...

 

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1. Given the following cash flow: Year End-of-year payment 1400 1500 1650 1300 1 2 $1400 FI200 $1500 3 $1650 PI 2 3 4 S 4 $1300 5 $1200 a) Assume the interest rate is 8%, how much would you have to put in the bank today in order to be able to pay this cash flow? b) If they let you pay in 5 equal payments instead of this cash flow, how much would be paying per year? Assume the same interest rate of 8%. 1. Given the following cash flow: Year End-of-year payment 1400 1500 1650 1300 1 2 $1400 FI200 $1500 3 $1650 PI 2 3 4 S 4 $1300 5 $1200 a) Assume the interest rate is 8%, how much would you have to put in the bank today in order to be able to pay this cash flow? b) If they let you pay in 5 equal payments instead of this cash flow, how much would be paying per year? Assume the same interest rate of 8%.