FV of multiple cash flows: Tariq Aziz will receive from his investment cash flows of $3,125, $3,450, and $3, 800. If he can earn 7.5 per cent on any investment that he makes, what is the future value of his investment cash flows at the end of three years? (Round to the nearest dollar.)

Question

Quizplus · Accepted Answer

The future value of each cash flow is calculated separately using the formula FV = PV * (1 + r)^n, where PV is the present value, r is the interest rate, and n is the number of periods. The future values are then summed up: FV1 = $3,125 * (1 + 0.075)^2, FV2 = $3,450 * (1 + 0.075)^1, FV3 = $3,800. Adding these gives approximately $11,120.

FV of Multiple Cash Flows: Tariq Aziz Will Receive from His