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You are to receive a cash flow of $1,750 three years from now. Once received, you will invest the money and earn a 5.5% retur

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Answer #1

FV = PV(1+r)^n

r is Int Rate & n is time to maturity

FV = PV(1+r)^n

= $ 1750 (1+0.055)^2

= $ 1750 * (1.055^2)

= $ 1750* 1.1130

= $ 1947.79 i.e $ 1948

OPtion C is correct.

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