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You expect to receive two cash flows: $41,000 paid in 5 years and $61,500 paid in...

You expect to receive two cash flows: $41,000 paid in 5 years and $61,500 paid in 10 years. The annual interest rate is 8%. What is the future value of the combined cash flows, in 15 years? EXPLAIN

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Answer #1

The cash flows at the end of 15 years in the case of first cash flows:

$41,000 * (1.08)^10

= $88,515.92

The second cash flows at the end of 10 years is :

$61,500 (1.08)^5

= $90,363.68

Therefore, the total cash flows at the end of 15 years is( $88,515.92 + $90,363.68 = $178,879.6)

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