Consider the following timeline detailing a stream of cash flows: If the current market rate of interest is 6%, then the future value (FV) of this stream of cash flows is closest to ________.
A) $1723
B) $1,500
C) $2068
D) $2757

Question

Consider the following timeline detailing a stream of cash flows:  If the current market rate of interest is 6%, then the future value (FV) of this stream of cash flows is closest to ________.
A) $1723 
B) $1,500 
C) $2068 
D) $2757

Quizplus · Accepted Answer

A) FV = 100(1 + 0.06)5 + 200(1 + 0.06)4 + 300(1 + 0.06)3 + 400(1 + 0.06)2 + 500(1 + 0.06)1 = $1723

Consider the Following Timeline Detailing a Stream of Cash Flows