Question

given the following cash inflow at the end of each year, what is the future value of this cash flow at 6%,8% and 15% interest rates at the end of year 7.                 year 1 $12,000.      year 2.   $21,000.   year 3. $30,000.    years 4 through 6: $0.     year 7.     $150,000

Answer 1

Answer:

Cash Flow at Year 1 = $12,000
Cash Flow at Year 2 = $21,000
Cash Flow at Year 3 = $30,000
Cash Flow at Year 4 = $0
Cash Flow at Year 5 = $0
Cash Flow at Year 6 = $0
Cash Flow at Year 7 = $150,000

Interest Rate = 6%

Present Value = $12,000 / 1.06 + $21,000 / 1.06^2 + $30,000 / 1.06^3 + $150,000 / 1.06^7
Present Value = $154,957.83

Interest Rate = 8%

Present Value = $12,000 / 1.08 + $21,000 / 1.08^2 + $30,000 / 1.08^3 + $150,000 / 1.08^7
Present Value = $140,453.75

Interest Rate = 15%

Present Value = $12,000 / 1.15 + $21,000 / 1.15^2 + $30,000 / 1.15^3 + $150,000 / 1.15^7
Present Value = $102,429.84