Question

An investment will pay $50 at the end of each of the next 3 years, $250 at the end of Year 4, $350 at the end of Year 5, and $550 at the end of Year 6. If other investments of equal risk earn 8% annually, what is its present value? Its future value? Do not round intermediate calculations. Round your answers to the nearest cent.

Present value:

Future value:

Answer 1

Present Value

Period	Cash Flow	Discounting Factor @8%	Present Value
1	50	0.92592592592	46.296296296
2	50	0.85733882029	42.8669410145
3	50	0.793832241	39.69161205
4	250	0.73502985277	183.757463192
5	350	0.680583197	238.20411895
6	550	0.63016962685	346.593294767
		Total	942.41

Future Value

Period	Cash Flow	Compounding factor @8%	Future Value
1	50	1.4693280768	73.46640384
2	50	1.36048896	68.024448
3	50	1.259712	62.9856
4	250	1.1664	291.6
5	350	1.08	378
6	550	1	550
		Total	1424.08