# Compounded Annual Growth Rate for Cash Flow Stream

P3-38. You are given the series of cash flows shown in the following table.

Cash Flows

Year A B C

1 $500 $1,500 $2,500

2 560 1,550 2,600

3 640 1,610 2,650

4 720 1,680 2,650

5 800 1,760 2,800

6 1,850 2,850

7 1,950 2,900

8 2,060

9 2,170

10 2,280

a. Calculate the compound annual growth rate associated with each cash flow stream.

b. If year-1 values represent initial deposits in a savings account paying annual interest, what is the annual rate of interest earned on each account?

c. Compare and discuss the growth rate and interest rate found in parts a and b, respectively.

© BrainMass Inc. brainmass.com October 9, 2019, 9:00 pm ad1c9bdddfhttps://brainmass.com/business/cash/169490

#### Solution Summary

This posting provides a detailed solution to the student's question.