(Solved): What is the future value in year 7 of these cash flows: Year 0 = $200; Year 1 = $240; Year 3 = $300; ...

Expert Answer

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Here we have to find the future value in the year 7 of these cash flows.



Here we have given that :- Year 0= $200 Year 1= $240 Year 3= $300 Year 4= $400 N= time = 7 years Interest rate= 6% or 0.06 Now we use the following formula to calculate the future value in the year 7. Here we have given that at year 0 we have given the cash flow is $200 that means we have take this value for 7 years after a one year we have given the cash flow is $240 that means we have left the 6 years to take this value.



So we use the formula is as :-