Quiz: Assignment 3 Question Help You have just ecatindainl tom an iweatment you

Question

Quiz: Assignment 3 Question Help You have just ecatindainl tom an iweatment you made in a tiend's busines She willbe paying you $31,980 at the end of tis yoar $43,.978 at the end of next yoac and $95, 957 a. Whet is the present velue of your windfar? b. What is the future value of your wind ial in tvee years (on the date of the last prymenk? The present value of your windlal iPRound to the nearest dolar) b. What is the future value of your windtall in ree years (on the date of the last paymen Enter your anawer in each of the anawer boxes. Save for MacBook Air 6 8

Explanation / Answer

Payments:
Year 1 = $31,989
Year 2 = $63,978
Year 3 = $96,967

Answer a.

Interest Rate = 14.70%

Present Value = $31,989/1.1470 + $63,978/1.1470^2 + $96,967/1.1470^3
Present Value = $140,778

Answer b.

Interest Rate = 14.70%

Future Value = $31,989*1.1470^2 + $63,978*1.1470 + $96,967
Future Value = $212,435

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