Question

Problem 4-7 Present and Future Value of an Uneven Cash Flow Stream An investment will pay $100 at the end of each of the next 3 years, $400 at the end of Year 4, $500 at the end of Year 5, and $700 at the end of Year 6. If other investments of equal risk earn 8% annually, what is its present value? Round your answer to the nearest cent What is its future value? Round your answer to the nearest cent.

Answer 1

4-7)

E14 1 2 | Year Cash flows | PVI F@8% | FVIF@8% 13 0 $ 14 1$ 100 15 2$ 100 16 3$ 100 Present value Future value 1.000 0.926 0.857 0.794 0.735 0.681 0.630 1.587 $ 1.469 $ 1.360 $ 1.260 $ 1.166$ 1.080 $ 1.000 $ 92.59 $ 85.73 $ 79.38 $ 294.01 $ 146.93 136.05 125.97 466.56 540.00 700.00 4 400 18 5$ 500 19 0 20 340.29 441.12 $ $1,333.13 21 Present value 22 Future value $2,115.51