If you spend 2606 today but save 10711 5 year from today and

If you spend $2,606 today, but save $10,711 5 year from today and $18,787 8 years from now, how much are these cash flows worth 24 years from today?

Assume i = 1%

Solution

Future worth ($) = - 2,606 x F/P(1%, 24) + 10,711 x F/P(1%, 19) + 18,787 x F/P(1%, 16)

= - 2,606 x 1.2697** + 10,711 x 1.2081** + 18,787 x 1.1726**

= - 3,308.84 + 12,939.96 + 22,029.64

= 31,660.76

**From F/P Factor table