A man recently invested $2,566.7 in a project that is promising to return 12 per

Question

A man recently invested $2,566.7 in a project that is promising to return 12 percent per year. The cash flows are as follows:
End of year Cash flow
1 $325 What is cash flow at end of 4th year?
2 $400 (Please try to show work I've been trying to solve it for
3 $550 a while and can't get it THANKS)
4 ?
5 $750
6 $800

Explanation / Answer

at year 1 we have P= 2,566.7 R =12 A = 2,566.7*1.12 = 2874.704 of this amount 325 is paid to man => P= 2874.70-325 = 2549.704 at year 2 we have P= 2549.704 R =12 A = 2549.704*1.12 = 2855.67 of this amount 400 is paid to man => P= 2855.67-400 = 2455.67 at year 3 we have P= 2455.67 R =12 A = 2455.67*1.12 = 2750.35 of this amount 550 is paid to man => P= 2750.35-550 = 2200.35 at year 4 we have P= 2200 R =12 A = 2200*1.12 = 2464 of this amount x is paid to man => P= 2464-x eq 1 Now coming from the back side we know that at the end of 6th year 800 was paid So let the principal at the end of 5 year be y y*1.12=800 =>y= 714.285714 Also in the 5th 750 was paid this makes the amount at the end of 5th year = 714.28+750= 1 464.28 Now this was calculated on 4th year principal of (2464-x) =>(2464-x)*1.12 =1 464.28 =>x =1156.60 4th year cash flow = 1156.60 some calculation might be off

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