Find the value closest to the effective annual rate

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At an annual effective rate of interest i, the following 2 payment streams have equal present values.

(i) $370 paid at the end of each year for 14 years.

(ii) A 14-year deferred perpetuity-immediate of $185 per year (i.e. first payment at time 15).

Find the value closest to the effective annual rate of interest.

Reference no: EM132643532

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