$1,200 is received at the beginning of year 1,$2,200 is received at the beginning of year 2,and $3,300 is received at the beginning of year 3.If these cash flows are deposited at 12 percent,their combined future value at the end of year 3 is:
A) $6,700
B) $17,000
C) $12,510
D) $7,504
E) $8,141

Question

Quizplus · Accepted Answer

Take the future value of each cash flow and then add them together:
FV = PV × 11ea7fdb_fc23_79d3_a768_89408e54ec78_TB2902_00 FV = 1,200 × (1.12 11ea7fdb_fc23_79d4_a768_712bc46cc22b_TB2902_00 = $1,685.91
FV = 2,200 × (1.12 11ea7fdb_fc23_79d5_a768_1382f864bc7f_TB2902_00 = $2,759.68
FV = 3,300 × (1.12 11ea7fdb_fc23_79d6_a768_c5e91ebcf6d3_TB2902_00 = $3,696
1,685.91 + 2,759.68 + 3,696 = $8,141.59

$1,200 Is Received at the Beginning of Year 1,$2,200 Is