Provide Comments to the response to 4-4 Problem below: Answer: = $57,971 Solutio
ID: 2770607 • Letter: P
Question
Provide Comments to the response to 4-4 Problem below:
Answer: = $57,971
Solution:
PV = C ÷ (1 + r )n
PV = $10,000 + $20,000 + $30,000 ÷ (1 + 1.035)3
0
1
2
3
$10,000
$20,000
$30,000
?
÷ 1.035
÷ 1.035
÷ 1.035
= $9,661.83 +
=$19,323.67 +
= $28,985.50
= $57,971
b.) What is thefuture value of your windfall in three years (on the date of thelast payment)?
Answer: $63,561.68
Solution:
FVn = C X (1 + r)n
FVn = $10,000 + $20,000 + $30,000 (1 +1.035)3 = $63,561.68
PV = C ÷ (1 + r )n
PV = $10,000 + $20,000 + $30,000 ÷ (1 + 1.035)3
Explanation / Answer
Present Value
Year
Cashflows
PV Factor at 3.5%
Present Values
Future Value
Year
Cashflows
PV Factor at 3.5%
Present Values
Present Value
Year
Cashflows
PV Factor at 3.5%
Present Values
0 $10,000 1 $10,000 1 $20,000 0.966 $19,320 2 $30,000 0.942 $28,260 Present Value $57,580Future Value
Year
Cashflows
PV Factor at 3.5%
Present Values
0 $10,000 1.071225 $10,712 1 $20,000 1.035 $20,700 2 $30,000 1 $30,000 Future Value $61,412Related Questions
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