Homework Answers
Interest Rate per period= 12%/2=6%
No. of Periods for Year 0 cashflow = 2*10 = 20
FV of Year 0 =1000*(1+6%)^20 = 1000*1.06^20 =1000*3.20713=$3207.13
No. of Periods for Year 4 cashflow = 2*(10-4) = 2*6=12
FV of Year 4 =3000*(1+6%)^12 = 3000*1.06^12 =3000*2.0122=$6036.59
No. of Periods for Year 6 cashflow = 2*(10-6) = 2*4=8
FV of Year 6 =1500*(1+6%)^8 = 1500*1.06^8 =1500*1.5938=$2390.77
Total FV = 3207.13+6036.59+2390.77 = $11634.49
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