Future Value
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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
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100 100 100
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The solution explains the calculation of future value
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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. ...
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