In: Finance
Find the future value of the following cash flow stream at a rate of 5%: Year 0: $0, Year 1: $400, Year 2 $300, Year 3 $250.
Discount rate | 5.0000% | ||
Cash flows | Year | Discounted CF= cash flows/(1+rate)^year | Cumulative cash flow |
- | 0 | - | - |
400.000 | 1 | 380.95 | 380.95 |
300.000 | 2 | 272.11 | 653.061 |
250.000 | 3 | 215.96 | 869.02 |
Present value = 869.02
future value = 869.02 * 1.05^3 = 1006.00