Question: At a nominal interest rate compounded quarterly, k , the following payment structures have the same present value: A payment of $600 at the end

At a nominal interest rate compounded quarterly, k, the following payment structures have the same present value:

  • A payment of $600 at the end of three years plus a payment of $1,000 at the end of six years
  • One payment of $1,400 at the end of three years

Find k.

  1. 7.5%

  2. 7.2%

  3. 6.8%

  4. 6.4%

  5. 6.1%

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