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Old 03-17-2018, 09:11 PM
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Originally Posted by xplicitator View Post
Since on the time diagram, we are at time 6. If you wrote 200 * (annuity immediate with n=10), then you are saying that starting at time 8, only payments of 200 are made. But in reality, at time 6-8, it's still 200, but starting with time 9, payments are 400 each rather than just 200. So 200(v + v^2) accounts for time 6 to 8 and then 400(v + v^2 + ....+ v^8) starting at time 9. Hope that helps!
You need a v^2 multiplying the second series.
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