Compute the Future Value, Knowing the Following Cash Flow.

Using a 15% interest rate, compute the value of F in the following cash flow:







SOLUTION


Looked at this way, we first solve for Fl.


Now F1 can be considered a present sum P in the diagram


The slightly different value from the preceding computation is due to rounding in the compound interest tables.

This has been a two-step solution:

One could substitute the value of F1 from the first equation into the second equation and solve for F, without computing Fl,



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