WHAT IS THE VALUE AT THE END OF YEAR 3 OF THE FOLLOWING CASH FLOW STREAM IF THE QUOTED INTEREST RATE IS 10 PERCENT, COMPOUNDED SEMIANNUALLY?
0 2 4 6 PERIODS
| | | |
100 100 100
Here the cash flow stream is annual ( being end of each 2 year period and each period is 6 months) and the interest is compounded semi annualy. The interest rate that we use should be the same as the frequency of cash flows. ...
The solution explains the calculation of future value