Is this the correct answer?
PV=-50,000+180,000/1+r+180,000/1+r squared=250,000
Responses
math - bobpursley, Monday, April 6, 2009 at 12:38pm
does r have a value?
math - anonymous, Monday, April 6, 2009 at 12:48pm
oh yes, r=20%
Without parenthesis,it is not possible to work.
If you mean this..
PV=-50,000+180,000/(1+r)+180,000/(1+r^2)
I get 273 076.923 on the Google search calculator.
ok, I think I'm getting closer. Thanks.
To determine if the given answer is correct, we can substitute the value of r into the equation and see if it satisfies the equation.
Given equation: PV = -50,000 + 180,000/(1+r) + 180,000/(1+r)^2 = 250,000
Substituting r = 20% in decimal form, we have r = 0.2.
Now, let's substitute this value into the equation:
PV = -50,000 + 180,000/(1+0.2) + 180,000/(1+0.2)^2 = 250,000
PV = -50,000 + 180,000/(1.2) + 180,000/(1.2)^2 = 250,000
Doing the calculations:
PV ≈ -50,000 + 150,000 + 125,000 ≈ 225,000
Since 225,000 is not equal to 250,000, the given answer is incorrect.
If you want to solve for the correct value of PV, you can use algebraic methods or numerical methods like the Newton-Raphson method to find the root of the equation.