answer the following two questions: 1. refer to the two cash flow diagrams below. if p1 = p2, then a. f1 =…

answer the following two questions: 1. refer to the two cash flow diagrams below. if p1 = p2, then a. f1 = f2 b. not enough information to determine c. f1 < f2 d. f1 > f2

answer the following two questions: 1. refer to the two cash flow diagrams below. if p1 = p2, then a. f1 = f2 b. not enough information to determine c. f1 < f2 d. f1 > f2

Answer

Explanation:

Step1: Use compound - interest formula

The compound - interest formula is $F = P(1 + r_1)(1 + r_2)$. For the first cash - flow diagram, $F1=P1(1 + 0.04)(1 + 0.08)$. For the second cash - flow diagram, $F2=P2(1 + 0.08)(1 + 0.04)$.

Step2: Compare F1 and F2

Since $P1 = P2$, and $(1 + 0.04)(1 + 0.08)=(1 + 0.08)(1 + 0.04)$, we have $F1=F2$.

Answer:

A. F1 = F2