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Present Value question

  1. Sep 4, 2007 #1
    [SOLVED] Present Value question

    I didn't really know where to post this. It's for an actuary class which eventually gets to applied statitistics, so I put it here. Anyways here it goes

    The sum of the present value of 1 paid at the end of n periods and 1 paid at the end of 2n periods is 1. Find (1 +i)^2n.

    The back of the book says the answer is 3/2 + sqrt(5)/2

    I start with

    1/(1+i)^n + 1/(1+i)^2n = 1

    There are no given values for i and n. Anyone able to help?
  2. jcsd
  3. Sep 4, 2007 #2


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    Let x = 1/(1+i)^n and y = 1/(1+i)^2n

    (Eq.1) x/y = (1 + r)^n
    (Eq.2) x + y = 1
    (Eq.3) 1/(1 + r)^n + 1/(1 + r)^(2 n) = 1

    Solve for x, y, r.
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