Based on the following cash flows, find the future value in year 9. Assume deposits were...

Based on the following cash flows, find the future value in year 9. Assume deposits were made at the end of the year and the rate of return is 15%.

Year	1	4	9
Cash Flows	9,000	4,000	1,000

Expert Solution

Year	Cash flow	Future value of 1 at the end of year 9	Future value of cash flow in year 9
a	b	c=1.15^(9-a)	d=b*c
1	9000	3.059	27,531.21
4	4000	2.011	8,045.43
9	1000	1.000	1,000.00

Total			36,576.63

So, future value of cash flow will be			36,576.63

Working:

c=1.15^(9-a) means:

For year :
1	=	1.15^(9-1)	=	3.059
4	=	1.15^(9-4)	=	2.011
9	=	1.15^(9-5)	=	1.749

jeff jeffy answered 1 year ago

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