Assuming an interest rate of 4.7 percent, what is the value of the following cash flows...

Question

Question

Assuming an interest rate of 4.7 percent, what is the value of the following cash flows five years from today?

Year 1: 3715

Year 2: 4795

Year 3: 5805

Year 4: 7120

Answer 1

Answer #1

Solution-

A= P(1+r) ^n

A= Future value

P= Present value

r= Rate of interest

n= number of years

A= 3715*(1.047)^4+ 4795*(1.047)^3 + 5805*(1.047)^2 + 7120*(1.047)^1

A= 4464.2195 + 5503.3692 + 6363.4932 + 7454.64= $23,785.7219

future value of cash flows = $23,785.72 (approx)

Answer 2

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