Homework Answers
| Future value = present value * FVIFA(Interest rate , n) | ||||||||||||
| For 24000, the Future value = 24000 * FVIFA(7% , 5) = 24000 * 5.751 = $138024 | ||||||||||||
| For Yearly payment, the Future Value = 2000 * FVIFA(7%,4) + 4000 * FVIFA(7%,3) + 6000 * FVIFA(7%,2) + 8000 * FVIFA(7%,1) + 10000 = | ||||||||||||
| 2000 * 4.440 + 4000 * 3.215 + 6000 * 2.070 + 8000 * 1 + 10000 = $52160 | ||||||||||||
| Selected Alt. : Lumpsum payment at present of $24000 would provide highest future value at the end of 5th year. | ||||||||||||
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