question archive Present and Future Value of an Uneven Cash Flow Stream An investment will pay $200 at the end of each of the next 3 years, $300 at the end of Year 4, $600 at the end of Year 5, and $800 at the end of Year 6
Present and Future Value of an Uneven Cash Flow Stream An investment will pay $200 at the end of each of the next 3 years, $300 at the end of Year 4, $600 at the end of Year 5, and $800 at the end of Year 6
Subject:FinancePrice:2.86 Bought3
Present and Future Value of an Uneven Cash Flow Stream
An investment will pay $200 at the end of each of the next 3 years, $300 at the end of Year 4, $600 at the end of Year 5, and $800 at the end of Year 6. If other investments of equal risk earn 11% annually, what is its present value? Round your answer to the nearest cent.
$
What is its future value? Round your answer to the nearest cent
Purchase A New Answer
Custom new solution created by our subject matter experts
GET A QUOTE
Answer Preview
Present value = Future value/(1+i)^n
i = interest rate per period
n= number of periods
present value = 200/1.11 + 200/1.11^2 + 200/1.11^3 + 300/1.11^4 + 600/1.11^5 + 800/1.11^6
= 1470.15
future value = 200 * 1.11^5 + 200 * 1.11^4 + 200 * 1.11^3 + 300 * 1.11^2 + 600 * 1.11 + 800
= 2749.78
