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For the cash flows shown, find the future worth in year 7 at į = 3% per year? (G is decreasing and equal to $200) Solve it in

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Answer #1
  • Following is the excel table for the FV of the given cash flow stream:
  • Year CF Compound factor Compounded CF
    2 $17,000.00 (1+0.03)^(7-2)= 1.159274074 1.1592740743*17000= $             19,707.66
    3 $16,800.00 (1+0.03)^(7-3)= 1.12550881 1.12550881*16800= $             18,908.55
    4 $ 16,600.00 (1+0.03)^(7-4)= 1.092727 1.092727*16600= $             18,139.27
    5 $16,400.00 (1+0.03)^(7-5)= 1.0609 1.0609*16400= $             17,398.76
    6 $16,200.00 (1+0.03)^(7-6)= 1.03 1.03*16200= $             16,686.00
    7 $16,000.00 (1+0.03)^(7-7)= 1 1*16000= $             16,000.00
    FV = Sum of all Compounded CF $          1,06,840.24
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