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I don't think this is correct. Can you confirm if this is the correct method...

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Question

Finance

I don't think this is correct. Can you confirm if this is the correct method and correct answer?

Given the following cash inflow at the end of each year, what is the future value of this cash flow at 6%, 9%, and 15% interest rates at the end of the seventh year?

Year 1 $15,000

Year 2 $20,000

Year 3 $30,000

Years 4 through 6 $0

Year 7 $150,000

Solution:

At 6% interest rate:

Future Value = $15,000 * (1 + 0.06) + $20,000 * (1 + 0.06) + $30,000 * (1 + 0.06) + $0 * (1 + 0.06) + $0 * (1 + 0.06) + $0 * (1 + 0.06) + $150,000 * (1 + 0.06) $136,648.84

At 9% interest rate:

Future Value = $15,000 * (1 + 0.09) + $20,000 * (1 + 0.09) + $30,000 * (1 + 0.09) + $0 * (1 + 0.09) + $0 * (1 + 0.09) + $0 * (1 + 0.09) + $150,000 * (1 + 0.09) $150,999.42

At 15% interest rate:

Future Value = $15,000 * (1 + 0.15) + $20,000 * (1 + 0.15) + $30,000 * (1 + 0.15) + $0 * (1 + 0.15) + $0 * (1 + 0.15) + $0 * (1 + 0.15) + $150,000 * (1 + 0.15) $182,439.67

Answer & Explanation Solved by verified expert
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