If today is Year 0, what is the future value of the following cash flows 10 years from now? Assume an interest rate of 6.9 percent per year.

Question

Quizplus · Accepted Answer

To find the future value, we need to use the formula:

FV = PV x (1 + r)^n

where PV is the present value (in Year 0), r is the interest rate, and n is the number of years.

We can find the present value of the cash flows by adding them up:
PV = -2000 - 3000 - 4000 - 6000 - 8000 = -23000

Now we can use the formula to find the future value:
FV = -23000 x (1 + 0.069)^10 = $38,604.00

Therefore, the best choice is C, $38,604.00.

If Today Is Year 0, What Is the Future Value