What is the value in year 20 of a $1,000 cash flow made in year 8 if interest rates are 15% in years 6 through 13 and increase to 18% in the remaining years?
A) $5,779.57
B) $5,9812.42
C) $6,005.71
D) $6,407.13

Question

Quizplus · Accepted Answer

The cash flow is compounded at 15% from year 8 to year 13 and then at 18% from year 14 to year 20. Calculating the future value involves compounding the $1,000 for 5 years at 15% and then for 7 years at 18%, resulting in $6,407.13.

What Is the Value in Year 20 of a $1,000