Question

Calculate the future worth of the purchase shown below using an interest rate of 9% per...

Calculate the future worth of the purchase shown below using an interest rate of 9% per year.

First Cost: -$20,000

Operating Cost: -$3,000/YR

Salvage Value: $4,000

Useful Life: 6 Years

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Homework Answers

Answer #1

We can convert given cash flow into future value using two formula

Method 1. Convert the cash flow into present value then convert it to future value.

Now convert it to future value

FW = - 31,072.69 × 1.096 = - $ 52,112.01

Method 2. Calculating the future value

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