Question: David owes Mark some money. Mark has offered to pay back the money he owes by one of these two options. Option 1: A payment
David owes Mark some money. Mark has offered to pay back the money he owes by one of these two options. Option 1: A payment of 500 at time 1 and a payment of 700 at time 6. Option 2: A payment of 800 at time 2 and a payment of X at time 4. Which of the following are equations of value that can be used to determine X, assuming both options have the same annual effective rate of interest i Select all that apply
500*(1+i)3 + 700*v2 = 800*(1+i)2 + X
500*v + 700*v6 = 800*v2 + X*v4
500*(1+i) 5 + 700 = 800*(1+i)4 + X*(1+i)2
500*v + 700*v6 =800*(1+i)4 + X*(1+i)2
500*(1+i) + 800 = 700*v4 + X*v2
500*v-1 + 700*v4 = 800 + X*v2
500*(1+i) + 700*v4 = 800 + X*v2
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