Consider the following timeline detailing a stream of cash flows: If the current market rate of interest is 6%,then the future value of this stream of cash flows is closest to:
A) $1,723
B) $1,500
C) $1,626
D) $1,288

Question

Consider the following timeline detailing a stream of cash flows:  If the current market rate of interest is 6%,then the future value of this stream of cash flows is closest to:
A) $1,723 
B) $1,500 
C) $1,626 
D) $1,288

Quizplus · Accepted Answer

A) FV = 100(1.06)⁵ + 200(1.06)⁴ + 300(1.06)³ + 400(1.06)² + 500(1.06)¹ = $1723

Consider the Following Timeline Detailing a Stream of Cash Flows