An investment will pay 343 two years from now 734 four years

An investment will pay $343 two years from now, $734 four years from now, and $1,446 five years from now. You are going to reinvest these cash flows at a rate of 12.66 percent per year What is the future value of this investment at the end of year five? Round the answer to two decimal places

Solution

Cash Flows:

Year 2 = $343
Year 4 = $734
Year 5 = $1,446

Interest Rate = 12.66%

Future Value = $343 * 1.1266^3 + $734 * 1.1266 + $1,446
Future Value = $2,763.38

So, future value of this investment at the end of year 5 is $2,763.38