Q: Calculate the total present value of the following payments:
$600 made at the end of each of the years 1 to 8
$900 made at the end of each of the years 9 to 15
if the annual effective interest rate is 7.5% for the first ten years and 9% thereafter.
I tried to use the present value formula:
PV = X(1+i)^-t
but dun know if it's right or wrong, and does the question have anything to do with the force of interest?
Please help, thanks alot!!!