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In: Finance
Chuck Brown will receive from his investment cash flows of $3,155, $3,500, and $3,820 at the...
Chuck Brown will receive from his investment cash flows of $3,155, $3,500, and $3,820 at the end of years 1, 2 and 3 respectively. If he can earn 7.5 percent on any investment that he makes, what is the future value of his investment cash flows at the end of three years? (Round to the nearest dollar.)
Solutions
Expert Solution
| CALCULATION OF THE FUTURE VALUE OF THE INVESTMENT | ||||
| Years | Cash Flow | Interest @ 7.5% | Cumulative Value | |
| 1 | $ 3,155 | $ - | $ 3,155 | |
| 2 | $ 3,500 | $ 237 | $ 3,392 | |
| 3 | $ 3,820 | $ 254 | $ 3,646 | |
| Answer =Future Value of the investment = | $ 3,646 | |||
| Note: There is no intrest on first year of investment because | ||||
| the investment is made at the year end. | ||||
jeff jeffy answered 1 hour agoRelated Solutions
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