Question

Consider a series of end-of-period CFs spanning 2046-2055, which decrease by a fixed amount each period....

Consider a series of end-of-period CFs spanning 2046-2055, which decrease by a fixed amount each period. The amount of the first CF in the series is $71 and the decrement is $71. The interest rate is 3.5%. What is the equivalent value of this series at the end of 2055?

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Homework Answers

Answer #1

FV = -2679.33

-----------------------------------------------------------------------------------------------------------------

Year

Cash flow

PV factor @3.5%

PV of cash flow

2046

71

1.362897353

96.76571208

2047

0

1.316809037

0

2048

-71

1.272279263

-90.33182766

2049

-142

1.229255326

-174.5542563

2050

-213

1.187686306

-252.9771831

2051

-284

1.147523001

-325.8965322

2052

-355

1.108717875

-393.5948456

2053

-426

1.071225

-456.34185

2054

-497

1.035

-514.395

2055

-568

-568

Total

-2679.325783

-----------------------------------------------------------------------------------------------------------------

Hope this answer your query.

Feel free to comment if you need further assistance. J

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