Question

Kevin is going to give you $400.50 in 3 years. Robert is going to give uou...

Kevin is going to give you $400.50 in 3 years. Robert is going to give uou $600.08 in 5 years. Assuming an interest rate of 5, how much will it all be worth in 10 years?

Homework Answers

Answer #1
Particulars 3 years 5 years Total
Receipt $       400.50 $       600.08
Years to maturity                      7                      5
Rate of interest 5% 5%
× future value factor         1.40710         1.27628
Future value $       563.54 $       765.87 $ 1,329.41

Answer is $1,329.41

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