I have a econ midterm coming up soon and stumbled upon this question. My approach is:
2C=800/(1.12^2)+1200/(1.12^6)=125.71 or C=1245.71/2=622.85
But I have a gut feeling this is wrong. I believe the answer is somewhere around $781.
Consider the following cash flow diagram. What value of C makes the inflow series equivalent to the outflow series at an interest rate of 12% compounded annually?