I don't know if I'm missing something here, but in ADAPT If i have a problem where each payment increases, I use this formula
(ignore the stuff at the bottom)
So for example if each payment increases by 3%, and the yield is 5%, I have 1.03/1.05 as R.
in TIA, with a similar problem, it will have the same formula but the denominator is yield minus increase (0.05 - 0.03)
These similar, but different answers, and I'm scared that on the exam some of the choices will be really close.
Am I missing something here?
(ignore the stuff at the bottom)
So for example if each payment increases by 3%, and the yield is 5%, I have 1.03/1.05 as R.
in TIA, with a similar problem, it will have the same formula but the denominator is yield minus increase (0.05 - 0.03)
These similar, but different answers, and I'm scared that on the exam some of the choices will be really close.
Am I missing something here?
Difference in PV of Geometric series in TIA and Adapt
