What is the relative value of the two streams

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Reference no: EM131234172

Solve Fibonacci's annuity problem given in the Anecdote:

Compare the PV of a stream of quarterly cash flows of 75 bezants versus the PV of a stream of annual cash flows of 300 bezants.

Payments are always at period-end. The interest rate is 2% per month. What is the relative value of the two streams? Compute the difference for a 1-year investment first.

Reference no: EM131234172

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