Question
Asked Feb 7, 2020
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For the cash flows shown, calculate the future worth in year 15 using i = 9% per year.

Year 0 1 2 3 4 5 6
Cash flow, $ 200 200 200 200 300 300 300

 

The future worth is calculated to be $

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Expert Answer

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Step 1

To get the future worth amount, we have to add each year’s future worth beaded on the cash flow of respective years.

Step 2

We can calculate the future worth amount using the following equation.

Economics homework question answer, step 2, image 1

 

Step 3

Suppose, for year 0, the cash flow is $200 and it get complete 15 years to grow at 9% per year, we can calculate the future worth amount for the particular year as follows.

Economics homework question answer, step 3, image 1

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