Question

Q3.) A lump sum cash flow at end of year I is x, then decreases an amount IG every year until end of gear 8 as the last cash flow. What is the equivalent future value at end of year 8 for all o cash flows from year I to year & above with the annual interest of 6% x= 6000 G=200 is 6%

plz solve

Answer 1

Calculation for equivalent future value of cash flows at the end of 8 years:

Year	cash flows	Interest factor	Future value of cash inflows
1	$ 6,000	( 1+ 0.6)^ 8	$ 9,563.09
2	$ 5,800	(1 + 0.6 )^ 7	$ 8,721.06
3	$ 5,600	( 1+ 0.6)^ 6	$ 7,943.71
4	$ 5,400	( 1 + 0.6)^ 5	$ 7,226.42
5	$ 5,200	( 1+ 0.6) ^ 4	$ 6,564.88
6	$ 5,000	( 1+ 0.6)^ 3	$ 5,955.08
7	$ 4,800	( 1+ 0.6)^ 2	$ 5,393.28
8	$ 4,600	(1+ 0.6) ^1	$ 4,876
Equivalent future value at the end of 8 year for all cash inflows =			$ 56,243.52 Or $ 56,244 (round of )