Question

1-Company expects revenue of $1 million in year 1, $1.2 million in year 2, and amounts increasing by $200,000 per year thereafter. If the company’s MARR is 5% per year, what is the future worth of the revenue through the end of year 10?

Answer 1

MARR = 5%

Future Value is calculated as: [Revenue * (1 + MARR)^{^Year}]

Year	Revenue	Years for which payment is compounded	Future Value
1	1,000,000	9	1,551,328.22
2	1,200,000	8	1,772,946.53
3	1,400,000	7	1,969,940.59
4	1,600,000	6	2,144,153.03
5	1,800,000	5	2,297,306.81
6	2,000,000	4	2,431,012.50
7	2,200,000	3	2,546,775.00
8	2,400,000	2	2,646,000.00
9	2,600,000	1	2,730,000.00
10	2,800,000	0	2,800,000.00
			22,889,462.68

Future value is 22,889,462.68