Question

What is the total future value in 35 years of the following cash flows: $11,000 invested...

What is the total future value in 35 years of the following cash flows: $11,000 invested today, $30,000 invested in 6 years and 7 months, and $45,000 invested in 15 years and 2 months? Use a discount rate of .8% monthly.

Please show me how I would set this up on excel...What equations would be used to solve each. Thank you!

Homework Answers

Answer #1

Let us calculate ..... "n" = number of months

For 11000, we have n = 35*12 months = 420 months

For 30000 we have = 420 - ( 6 * 12 + 7 ) = 341 months

For 45000 we have = 420 - ( 15 * 12 + 2 ) = 238 months

Excel sheet operations

(1) Enter 11000, 30000 and 45000 in the cells A1 , A2, and A3

(2) Enter the formula ............. =POWER(1.008,420) in B1

=POWER(1.008,341) in B2

=POWER(1.008,238) in B3

(3) Multiply the A1 and B1 in the cell C1 ........... in the cell C1 enter = A1 * B1 and then drag the formula for C2 and C3.

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