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Montano1993 [528]
4 years ago
14

Consider the following cash flows: Year Cash Flow 2 $ 22,200 3 40,200 5 58,200 Assume an interest rate of 9 percent per year. a.

If today is Year 0, what is the future value of the cash flows five years from now?
Business
1 answer:
miss Akunina [59]4 years ago
8 0

Answer:

Total FV= $134,711.26

Explanation:

Giving the following information:

Cash Flow:

Cf2= $22,200

Cf3= $40,200

Cf5= $58,200

Interest rate= 9 percent per year.

To calculate the future value, we need to use the following formula on each cash flow:

FV= PV*(1+i)^n

Cf2= 22,200*(1.09^3)= 28,749.64

Cf3= 40,200*(1.09^2)= 47,761.62

Cf5= 58,200

Total FV= $134,711.26

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