Question: Consider an EOY geometric gradient, which lasts for nine years, whose initial value at EOY one is $4,700 and f=7% per year thereafter. Find the

Consider an EOY geometric gradient, which lasts for nine years, whose initial value at EOY one is $4,700 and f=7% per year thereafter. Find the equivalent uniform gradient amount over the same period if the initial value of the cash flows at the end of year one is $4,200. Complete the following questions to determine the value of the gradient amount, G. The interest rate is 9% per year.

a. What is P0 for the geometric gradient series?

b. What is P0 of the uniform (arithmetic) gradient of cash flows?

c. What is the value of G?

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