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Based on the following cash flows, find the future value in year 9. Assume deposits were...

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Finance

  1. Based on the following cash flows, find the futurevalue in year 9. Assume deposits were made at the end ofthe year and the rate of return is 15%.

Year

1

4

9

Cash Flows

9,000

4,000

1,000

Answer & Explanation Solved by verified expert
3.8 Ratings (389 Votes)

Year Cash flow Future value of 1 at the end of year 9 Future value of cash flow in year 9
a b c=1.15^(9-a) d=b*c
1 9000               3.059 27,531.21
4 4000               2.011     8,045.43
9 1000               1.000     1,000.00
Total 36,576.63
So, future value of cash flow will be 36,576.63
Working:
c=1.15^(9-a) means:
For year :
1 = 1.15^(9-1) =         3.059
4 = 1.15^(9-4) =         2.011
9 = 1.15^(9-5) =         1.749

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Transcribed Image Text

Based on the following cash flows, find the futurevalue in year 9. Assume deposits were made at the end ofthe year and the rate of return is 15%.Year149Cash Flows9,0004,0001,000

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