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Assuming an interest rate of 6.6 percent, what is the value of the following cash flows...

Assuming an interest rate of 6.6 percent, what is the value of the following cash flows five years from today? Year Cash Flow 1 $ 3,615 2 4,715 3 5,705 4 7,000

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Answer #1

Future value = CF(1+r)n

Future value = CF (1+r)4 +CF (1+r)3 +CF (1+r)2 +CF (1+r)1

Future value= 3615 (1+.066)4 + 4715(1.066)3 + 5705 (1+.066)2 + 7000(1+.066)= 4668.07+ 5711.54+ 6482.91+ 7462=24324.52

CF means cash flow,

r means rate of interest

n mean number of period

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