Question

Consider a series of $98 end-of-period CFs spanning 2052-2055 and a $52 CF at the end of 2040. The interest rate is 2.3%. What is the equivalent value of these CFs at the beginning of 2060?

Answer 1

the detailed answer for calculating equivalent value is explained below
An at tue beginiva of 206o , Num buot years 2060~ 2052 'The futre value of 52-2055 es ure Value , 98 x(1.023 FV $ 1 22.22 fv 114-90

Ciİ ) FV 字98 X (1.023) $98 x 1-1204 Total Future Value FV二丰122.11 t $114.90 +$112.32+$ 19.8 Namba. of years 2 2060-2040 The future value of 40 s 2.0 52 x .5153