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26 October, 09:20

Robert White will receive from his investment cash flows of $4,450, $4,775, and $5,125. If he can earn 7 percent on any investment that he makes, what is the future value of his investment cash flows at the end of three years

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  1. 26 October, 11:20
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    Total future value = $16,402.09

    Explanation:

    Giving the following information:

    Robert White will receive from his investment cash flows of $4,450, $4,775, and $5,125. He can earn 7 percent on any investment that he makes.

    To calculate the future value, we need to use the following formula for each cash flow:

    FV = PV * (1+i) ^n

    Year 1 = 4,450*1.07^3 = 5,451.44

    Year 2 = 4,775*1.07^2 = 5,466.90

    Year 3 = 5,125*1.07 = 5,483.75

    Total future value = $16,402.09
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