Question

Consider the following cash flows: Year Cash Flow $22,700 40,700 58,700 Assume an interest rate of 9.5 percent per year. a. If today is Year O, what is the future value of the cash flows five years from now? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. If today is Year O, what is the future value of the cash flows ten years from now? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Value in five years Value in ten years b.

Thank you for any help.

Answer 1

Year | | Cash flow $0 $22,700 $40,700 $0 $58,700 fv @ 9.5% 1.438 1.313 1.199 1.095 1.000 future value cash flow x fv @ 9.5% $0.00 $29,803.56 $48,800.32 $0.00 $58,700.00 $137,303.88 | | | Future value at year 5 Future value at year 10 $216,149.09 [ 137303.88 x 1.09545 ]