Booker, Inc, has identifed an investment project with the following cash flows F

Question

Booker, Inc, has identifed an investment project with the following cash flows Flow $1,050 1.280 1,500 l the discount rate is 7 percent, what is the future value of these cash fows in Year 32.16.) 7 (Do not round intermediate calculations and round your answer to 2 decimal places, e.g What is the future value at an interest rate of 13 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, o.g, 32.16.) What is the future value at an interest rate of 22 percent? (Do not round intermedilate calculations and round your answer to 2 decima places, e.g., 32.16)

Explanation / Answer

We use the formula:
A=P(1+r/100)^n
where
A=future value
P=present value
r=rate of interest
n=time period.

1.

A=1050(1.07)^3+1280(1.07)^2+1500(1.07)+2240

which is equal to

=$6596.77(Approx).

2.

A=1050(1.13)^3+1280(1.13)^2+1500(1.13)+2240

which is equal to

=$7084.47(Approx).

3.

A=1050(1.22)^3+1280(1.22)^2+1500(1.22)+2240

which is equal to

=$7881.79(Approx).

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