Question

Moving Cash Flows What is the value in year 12 of a $2,200 cash flow made in year 5 when the interest rates are 10 percent?

Answer 1

We use the formula:
A=P(1+r/100)^n
where
A=future value
P=present value
r=rate of interest
n=time period.

Hence

A=$2200(1+10/100)^7

=$2200*1.1^7

=$2200*1.9487171

which is equal to

=$4287.18(Approx)(Please note that intermediate calculations have not been rounded off].