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Ben Woolmer has an investment that will pay him the following cash flows over the next...

Ben Woolmer has an investment that will pay him the following cash flows over the next five years: $2,390, $2,740, $3,130, $3,440, and $3,690. If his investments typically earn 6.40 percent, what is the future value of the investment’s cash flows at the end of five years?

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Answer #1

We use the formula:
A=P(1+r/100)^n
where
A=future value
P=present value
r=rate of interest
n=time period.

Hence

A=$2390*(1.064)^4+2740*(1.064)^3+3130*(1.064)^2+3440*(1.064)^1+3690

which is equal to

=$17257.21(Approx).

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