Suppose today is January 1st, and you have planned to invest $12,000 at the end of this year, $14,220 at the end of the second year, and $15,600 at the end of the third year. If you can earn a 14% rate of return in each year, what is the future value of this stream of cash flows at the end of 4 years?

Question

Laurel

Business

3 April, 19:17

Suppose today is January 1st, and you have planned to invest $12,000 at the end of this year, $14,220 at the end of the second year, and $15,600 at the end of the third year. If you can earn a 14% rate of return in each year, what is the future value of this stream of cash flows at the end of 4 years?

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Gamble · Answer 1

The future value of this stream of cash flows at the end of 4 years $54,042.84

Explanation:

FV = C° * (1+r) ∧ n =

At the end of the year 1 = $12,000 (1+0,14) ∧ 3 = $12,000 * 1.48 = $17,778.53

At the end of the year 2 = $14,220 (1+0,14) ∧ 2 = $14,220 * 1.30 = $18,480.31

At the end of the year 3 = $15,600 (1+0,14) ∧ 1 = $15,600 * 1.30 = $17,784.00

$17,778.53 + $18,480.31 + $17,784.00 = $54,042.84