The sum of the individual end of year 5 future values

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Unformatted text preview: needed to find the future value of the cash flow stream, which turns out to be $83,601.40. Calculator Use You can use your calculator to find the future value of each individual cash flow, as demonstrated earlier (page 138), and then sum the future values, to get the future value of the stream. Unfortunately, unless you can program your calculator, most calculators lack a function that would allow you to TABLE 4.3 Future Value of a Mixed Stream of Cash Flows Number of years earning interest (n) (2) FVIF8%,na (2) Future value [(1) (3)] (4) Year Cash flow (1) 1 $11,500 5 1 4 1.360 $15,640.00 2 14,000 5 2 3 1.260 17,640.00 3 12,900 5 3 2 1.166 15,041.40 4 16,000 5 4 1 1.080 17,280.00 5 18,000 5 5 0 1.000b 18,000.00 Future value of mixed stream aFuture $83,601.40 value interest factors at 8% are from Table A–1. future value of the end-of-year-5 deposit at the end of year 5 is its present value because it earns interest for zero years and (1 0.08)0 1.000. bThe CHAPTER 4 Time Value of Money 151 input all of the c...
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This document was uploaded on 03/03/2014 for the course MBA BMMF at Open University Malaysia.

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