What is the value in year 6 of a $900 cash flow made in year 4 when the interest rates are 8 percent?
A) $1,044.00
B) $1,049.76
C) $1,332.00
D) $1,428.19

Question

Quizplus · Accepted Answer

To find the value in year 6 of a $900 cash flow made in year 4, you would apply the formula for future value: FV = PV * (1 + r)^n, where PV is the present value, r is the interest rate per period, and n is the number of periods. Here, PV = $900, r = 0.08 (8 percent), and n = 2 years (from year 4 to year 6). Thus, FV = $900 * (1 + 0.08)^2 = $900 * 1.1664 = $1,049.76.

What Is the Value in Year 6 of a $900