Answer:
$641,547.38
Explanation:
The formula for calculating future value:
FV = P (1 + r)^n
FV = Future value
P = Present value
R = interest rate
N = number of years
We are to determine the future value of these cash flows. But to determine the future value, we need to determine the present value of the cash flows.
Present value is the sum of discounted cash flows
Present value can be calculated using a financial calculator
To find the PV using a financial calculator:
Cash flow in year 0 = $10,000
Cash flow in year 1 = $15,000
Cash flow in year 2 = 0
Cash flow in year 3 = 0
Cash flow in year 4 = $25,000
I = 9.6
PV = 41,012.11
FV : 41,012.11(1.096)^30 = $641,547.38
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
