In: Finance
Suppose you will receive payments of $1,000, $10,000, and $9,000 in 1, 6, and 9 year(s) from now, respectively. What is the total future value of all payments 13 years from now if the interest rate is 10%?
We use the formula:
A=P(1+r/100)^n
where
A=future value
P=present value
r=rate of interest
n=time period.
A=1000*(1.1)^12+10,000*(1.1)^7+9000*(1.1)^4
=$35802.5(Approx)