Question

# What single amount, at the end of the fourth year, is equivalent to a uniform annual...

What single amount, at the end of the fourth year, is equivalent to a uniform annual series of \$5,000 per year for 10 years, if the interest rate is 8% per year, compounded  annually?

* Answer to expert question. This is what was given so not sure on your question about cash flows.

 Interest Rate = 8% Time Period = 10 Years Annual Series Payment = \$ 5,000 Present Value of Series = \$ 5,000 * PVAFdue(8%,10 years) Present Value of Series = \$ 5,000 * 7.2475 Present Value of Series(at the beginning of Year1) = \$ 36,237.5
 Single amount at the end of 4th year = \$ 36,237.5 * FV(8%,4 Years) Single amount at the end of 4th year = \$ 36,237.5 * (1+0.08)^4 Single amount at the end of 4th year = \$ 36,237.5 * 1.3605 Single amount at the end of 4th year = \$ 49,300.72
 Computation of PVAFdue: r 1+r (1+r)^-(n-1) 1- [(1+r)^-n] [1- [(1+r)^-n]] /r P{1+ [1- [(1+r)^-n]] /r} 8% 1.0800 0.5002 0.4998 6.2475 7.2475

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