Question

8. Calculate the Future Value of the following cash flow stream. Assume that 12.50% is the appropriate rate. Year Cash Flow 1-5 $2,000 6-12 4,000 13 10,000 14-20 13,000 21-25 16,000

Answer 1

$ 708,583.38

Year	Cash Flow	Future Value of 1	Future Value of cash flow
a	b	c=1.1250^(25-a)	d=b*c
1	$       2,000	16.8912	$     33,782.40
2	$       2,000	15.0144	$     30,028.80
3	$       2,000	13.3461	$     26,692.27
4	$       2,000	11.8632	$     23,726.46
5	$       2,000	10.5451	$     21,090.19
6	$       4,000	9.3734	$     37,493.67
7	$       4,000	8.3319	$     33,327.70
8	$       4,000	7.4062	$     29,624.63
9	$       4,000	6.5833	$     26,333.00
10	$       4,000	5.8518	$     23,407.11
11	$       4,000	5.2016	$     20,806.32
12	$       4,000	4.6236	$     18,494.51
13	$     10,000	4.1099	$     41,098.91
14	$     13,000	3.6532	$     47,492.07
15	$     13,000	3.2473	$     42,215.17
16	$     13,000	2.8865	$     37,524.60
17	$     13,000	2.5658	$     33,355.20
18	$     13,000	2.2807	$     29,649.07
19	$     13,000	2.0273	$     26,354.72
20	$     13,000	1.8020	$     23,426.42
21	$     16,000	1.6018	$     25,628.91
22	$     16,000	1.4238	$     22,781.25
23	$     16,000	1.2656	$     20,250.00
24	$     16,000	1.1250	$     18,000.00
25	$     16,000	1.0000	$     16,000.00
	Total		$ 7,08,583.38