David can receive one of the following two payment streams: i. 100 at time 0, 200 at time n, and 300 at time 2n
ii. 600 at time 1 0

At an annual effective interest rate of i, the present values of the two streams arc equal. Given v^n = 0.75941.

Determine i.

3.51%

Step-by-step explanation:

From the given information:

For the first stream, the present value can be computed as:

Present value for the second stream is:

Relating the above two equations together;

consider , Then:

where:

Now;

v = 0.9661

Recall that:

We can say that:

b

step-by-step explanation: