Question

You expect to receive $5,400 two years from now, $6,300 three years from now, and $10,900 six years from now. What is the future value of these cash flows seven years from now if the interest rate is 7.4 percent, compounded annually

Answer 1

Total FV= $27,805.2

Step-by-step explanation:

Giving the following information:

You expect to receive $5,400 two years from now, $6,300 three years from now, and $10,900 six years from now.

Interest rate= 7.4%

To calculate the Future Value, we need to use the following formula:

FV= Cf*(1 + i)^n

Cf1= 5,400*(1.074^5)= 7,716.41

Cf2= 6,300*(1.074^4)= 8,382.19

Cf3= 10,900*1.074= 11,706.6

Total FV= $27,805.2