Calculating present/ future value of given cash flows
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1. Calculate the future value of 1,535 invested today for 8 years at 6 percent.
2. What is the total present value of the following cash stream, discounted at 8 percent?
Year Amount
1 400
2 750
3 945
4 145
5 78
3. If you invested $2,000 per year into an IRA for 30 years and received 6 percent return each year, what would the account balance be in 30 years?
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Solution Summary
Solution describes the steps to calculate present and future value of cash flows.
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Please refer attached file for missing formulas. Formulas typed with the help of equation writer are missing here.
1.Calculate the future value of 1,535 invested today for 8 years at 6 percent.
Present Value of cash flow (PV)=$1535
Number of periods=n=8 years
Return=i=6%
FV of single cash flow=PV*(1+i)^n
FV=1535*(1+6%)^8=$2446.56
Future value of 1,535 invested today for 8 years at 6 percent will be $2446.56
2.What ...
Education
- BEng (Hons) , Birla Institute of Technology and Science, India
- MSc (Hons) , Birla Institute of Technology and Science, India
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