Question

Required information

Assume that 25 years ago your dad invested $200,000, plus $26,000 in years 2 through 5, and $49,000 per year from year 6 on.

At a very good interest rate of 14% per year, determine the CC value.

The CC value is determined to be $  .

4265.80 is not correct

Answer 1

Interest Rate = 14%

CC Value = $200,000*1.14^25 + $26,000 *1.14^23 + $26,000 *1.14^22 + $26,000 *1.14^21 + $26,000 *1.14^20 + $49,000 *1.14^19 + $49,000*1.14^18 + ... + $49,000*1.14 + $49,000
CC Value = $200,000*1.14^25 + $26,000 *1.14^23 + $26,000 *1.14^22 + $26,000 *1.14^21 + $26,000 *1.14^20 + $49,000 * (1.14^20 - 1) / 0.14
CC Value = $5,292,383.16+ $1,758,476.01+ $4,460,221.46
CC Value = $11,511,080.63

The CC value is determined to be $11,511,080.63

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