Year Cash Flow 1 $3590 2 4695 3 5680 4 6970 Assuming an interest rate of...

Question

Question

Assuming an interest rate of 6.5 percent, what is the value of the following cash flows five years from today?

Answer 1

Answer #1

Cash Flows:
Year 1 = $3,590
Year 2 = $4,695
Year 3 = $5,680
Year 4 = $6,970

Interest rate = 6.50%

Future value = $3,590*1.065^4 + $4,695*1.065^3 + $5,680*1.065^2 + $6,970*1.065
Future value = $24,155.19

Therefore, value of cash flows five years from now is $24,155.19

Answer 2

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