Your SlideShare is downloading.
×

- 1. Given the following cash flows that earns 5% interest compounded annually, what is the equivalent amount of the cash flows shown below at the end of year 3? N Amount 0 -$1,000 1 -$1,000 2 $1,210 3 $1.950 N Amount 0 -$1,000 1 -$1,000 2 $1,210 3 $1.950 Solution 5% N Amount FV FV of Cash Flows 0 ($1,000) 1.157625 ($1,158) 1 ($1,000) 1.1025 ($1,102.50) 2 $1,210 1.05 $1,270.50 3 $1,950.00 1 $1,950.00 $960.38