Lucy Anders wishes to save $700 at the end of each year for the first four...

Lucy Anders wishes to save $700 at the end of each year for the first four years. At the end of each of the fifth ,sixth, and seventh years, she wishes to save $625. Find the future value of this cash flow at the end of the seventh year if the interest rate is 4.7% compounded annually.

Expert Solution


Year	Cash Flow	Calculations	Future value
1	$ 700	=$700*1.047^6	$ 922.10
2	$ 700	=$700*1.047^5	$ 880.71
3	$ 700	=$700*1.047^4	$ 841.17
4	$ 700	=$700*1.047^3	$ 803.41
5	$ 625	=$625*1.047^2	$ 685.13
6	$ 625	=$625*1.047^1	$ 654.38
7	$ 625	=$625*1.047^0	$ 625.00
Total			$ 5,411.90

Correct Answer = $5411.90

jeff jeffy answered 2 years ago

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