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Reika [66]
3 years ago
14

UNEVEN CASH FLOW STREAM

Business
1 answer:
vladimir2022 [97]3 years ago
4 0

Answer:

                        Present Value

Stream A                $1,251.247

Stream B                 $1,300.316

Explanation:

<em>The present value  of a future sum is the amount that would be invested today at the prevailing interest rate to have the sum</em>

Stream A

(100 × 1.08^9-1) + (400× 1.08^-2) + (400× 1.08^-3) + (400× 1.08^-4) + (300× 1.08^-5) = $1,251.247

Stream B

(300 × 1.08^9-1) + (400× 1.08^-2) + (400× 1.08^-3) + (400× 1.08^-4) + (100× 1.08^-5) = $1,300.316

                          Present Value

Stream A                $1,251.247

Stream B                 $1,300.316

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The calculation used is mentioned as

Annual\ Interest\ Amount\ =\frac{Loan\ balance\ X\ Interest\ Rate}{12}.

What is Annual Interest Amount?

  • An interest rate is written as an annual percentage rate. It factors in variables like monthly payments to determine what proportion of something like the principal you'll be  paying yearly. APR is another term for the yearly rate of interest payable on investments that does not take into account the annual compounding of interest.
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The calculation used is illustrated as :

Annual\ Interest\ Amount\ =\frac{Loan\ balance\ X\ Interest\ Rate}{12}

Learn more about Annual Interest Amount here:

brainly.com/question/2151013

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