Question

I am using a BAII Plus calculator. So please help me with utilizing the calculator.

An investment will pay $100 at the end of each of the next 3 years, $200 at the end of Year 4, $300 at the end of Year 5, and $550 at the end of Year 6. If other investments of equal risk earn 10% annually, what is its present value? Its future value? Do not round intermediate calculations. Round your answers to the nearest cent. Present value: $ Future value: $

Answer 1

Present value:

Present value =- 100 100 1.101 + 1.102 100 1.103 200 1.104 300 550 1.105 + 1.106

Present value = 90.91 + 82.64 + 75.13 + 136.60 + 186.28 + 310.46

Present value = 882.02

Future value:

Future value = (100 x (1.10) + 100 (1.10) + 100 x (1.10)3 + 200 x (1.10)2 + 300 x (1.10) + 550]

Future value = 161.051 + 146.41 + 133.1 +242 + 330 + 550

Future value = 1,562.56