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A nch aunt has promised you $3.660.00, one year from today. In addition, each year after that she has promised a payment on the anniversary of the last payment that is 400% larger than the last payment. She wil continue to show this generosity for 25 years, g ing a total of 25 payments if the interest rate is 8 00%, what s her prom se worth totaf? Answer Format: Currency: Round to: 2 decimal places. Enter Answer Here.. Submit Answer t All Problems Next Problem

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Answer #1
Year cash flow = previous year*(1+growth rate) cash flow/(1+r)^n r =8%
1 3660 3388.8889
2 3806.4 3263.3745
3 3958.656 3142.5088
4 4117.0022 3026.1196
5 4281.6823 2914.041
6 4452.9496 2806.1136
7 4631.0676 2702.1835
8 4816.3103 2602.1026
9 5008.9627 2505.7284
10 5209.3212 2412.9237
11 5417.6941 2323.5561
12 5634.4018 2237.4985
13 5859.7779 2154.6282
14 6094.169 2074.8271
15 6337.9358 1997.9817
16 6591.4532 1923.9824
17 6855.1114 1852.7238
18 7129.3158 1784.1044
19 7414.4884 1718.0264
20 7711.068 1654.3958
21 8019.5107 1593.1219
22 8340.2911 1534.1174
23 8673.9028 1477.2982
24 9020.8589 1422.5835
25 9381.6932 1369.8952
present value of promise sum of present value of future cash flow 55882.73
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