Question

Lucas will receive one time cash flows of 7100, 8700 and 12500 at the end of years 1,2, and 3 respectively. What’s is the future value of these cash flows at the end of year five if he interest rate is 9%?

Answer 1

The future value of this amounts after 5 years in the order they will be recieved will be:
FV=p(1+r/100)^n

a. $7100
FV=7100(1+9/100)^5
FV=7100(1.09)^5
FV=$10,924.23

b.$8700
FV=8700(1+9/100)^5
FV=8700(1.09)^5
FV=$ 13,386.03

c. $12500
FV=12500(1+9/100)^5
FV=12500(1.09)^5
FV=$19,232.80