Question

In: Finance

Suppose you will receive payments of $1,000, $10,000, and $9,000 in 1, 6, and 9 year(s)...

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%?

Solutions

Expert Solution

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)


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