If today is year 0, whatbis the future value of the following cash flows 9 years from now? Assume an interest rate of 6

Finance Aug 28, 2020

If today is year 0, whatbis the future value of the following cash flows 9 years from now? Assume an interest rate of 6.6 percent per year.

Year 2 $8.800

Year 4 $9.300

Year 6 $7.100

Expert Solution

We know that,

Future Value = Amount * (1+rate)^(last year - current year) + Amount * (1+rate)^(last year - current year) Amount * (1+rate)^(last year - current year) + Amount * (1+rate)^(last year - current year)

Future Value = 8800 * (1+0.066)^(9 - 2) + 9300 * (1+0.066)^(9-4) + 7100 * (1+0.066)^(9-6)

= $35167.58 Answer

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