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problem: I will pay you dollar 40,000 at the end of this year, dollar 30,000 at the end of each of the next 3 years, and then Dollar20,000 at the end of the 5th year.  The interest rate is 5.0 percent per year.

[A] find out the present value of this cash stream?
[B] If I borrow the dollar 40,000 at the beginning at 5 percent, and then reinvest all the proceeds, find out the future value of this cash stream on the date of the last payment?

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M917844

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