fin340_ic5_solutions

Chapter 5: Time Value of Money                                                                    Integrated Case    1

An annuity is a series of equal cash flows occurring over equal intervals, as illustrated in the middle time line.

 

An uneven cash flow stream is an irregular series of cash flows that do not constitute an annuity, as in the lower time line. -50 represents a cash outflow rather than a receipt or inflow.

 

B.           (1) What’s the future value of $100 after 3 years if it earns 10%, annual compounding?

 

ANSWER: [Show S5-5 through S5-7 here.] Show dollars corresponding to question mark, calculated as follows:
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