Question

You have decided to save $500 a year for the next five years and then increase that amount to $700 a year for the following five years. Which one of these correctly reflects a multiple annuity time line for the future value of your savings?A. The time line will have a $500 cash flow for Years 1-5 and a $700 cash flow for Years 6 - 10. B. The time line will have a -$700 cash flow for Years 1 - 5 and a $500 cash flow for Years 6-10. C. The time line will have a $500 cash flow for Years 1 - 10 and an additional $200, cash flow for Years 6 - 10. D. The time line will have a -$500 cash flow for Years 1 - 10 and an additional -$200 cash flow for Years 6 - 10.

Answer 1

A. The time line will have a $500 cash flow for Years 1-5 and a $700 cash flow for Years 6 - 10.

Step-by-step explanation:

A timeline orders events chronologically. Here, the timeline would list cash flows in the order in which they occur.

Please check the attached image for an image of the timeline.

I hope my answer helps you