Future Value of an Uneven Cash Flow Stream The Problem Your rich great grandfather has promised to pay you 5100 at the end of this year, $200 at the end of year for the next three year, and a certime payment of 5400 as the end of the Sith you. You could invest hfws is this cash flow stream worth to you five years from today? There is an embedded it from your way to Finance Come CPI Future Value Summation of Cash Flows Future Value Interest Farm Future Value -COMINCFICIIN-CF3N3.0733_CFNINN Numerical Slatina: F1-8+180FVIFFVIFAAAARFRIFOR PVS - 1001.0834 + 2001.B 2001.02.2016) FV5-116.05 +25194 213.33.215.20 FV5-1237.27 In Wunds The value of a cash flow of $100 in your 1.5200 in your 2.1. und 4 und 5400 l you will be worth $1,23727 at the end of the fifth you Spreadsheet Set Use formulas to find your answer by completing the PV Table: Yerd Today 0.05 Interest and 0.00 2001 PV interector Flere Fint we met alle the FV Interest Factor for each cash flow in rowd. VF-14 In cell E33 enter the formule - (l+304 udp 33 33 You must change the experts in cele 33 tech 133. 2 Then, we find the Volcach cash flow in In cell E34 enter the FV formuleCF FVF-E32E33 and 4 og 134 3 Lastly, we som the PVs to get the PV of the annuity in cell In cell 334 code the formule 34:134) 4 Your answer should be: The Fof the cash flows is $1.237.27 Now you can change any of inputs and Excel will stomatically room Test you will What is the Future Value of the literare Copy and paste (value) and then reset the table. Spreadsheet Set Moving for the Annuky Separately Today 012 Year 0.12 0.12 Interest and Time & Vino Future Value Annuity f Future Vale 1. First we mult calculate the FV Interest Factor for each cash flow in rowd. PVC- In cell E82 enter the fomnule - d+S4 and copy otrogh 12 You must change the expens in celisPeter 12 2. Then, we find the FV of the embedded annuity by clicking on cell 63. Incellier the Fantara: -FWS Test your skills: What is the Future Value of the interest rate is 5%? Copy and paste (value) and then reset the table. Spreadsheet Solution Solving for the Annuity Separately Today 0.121 Years 0.12 Solution 0.12 0.12 Year 0.12 1 100 Jard 0.12 4 200 200 200 400 a interest Rand Time Cash Flow d FV interest actor e Future Value Annuity f Future Value 1. First we must calculate the FV Interest Factor for each cash flow in rowd. FVIF-(lernt In cell E62 enter the formulu: -(1+E894 und copy to cells F62 through 162 You must change the exponents in cells P62 through 162. 2. Then, we find the FV of the embedded annuity by clicking on cell H63. In cell H63 enter the FV annuity formula: -FVYH59.3.200) or use the wizard 3. Now we can find the Future Value of three cash flows in cells E4, H64, and 164. In cell E64 enter the formula: -E61 E63 In cell H64 enter the formula: - H63*H62 In cell 164 enter the formula - 162 161 4. Lastly, we sum the FVs to get the FV of all the cash flows in cell 364 In cell 364 enter the formula: sum[E64:164) of sum[E64 +H64 +164) 5. Your answer should be: $1,313.22 is the FV of the cash flows. Test your skills In this Table, you must fill in the inputs for the interest rate, time, cash flows. Then you will write the formulas for the FV interest factor, the formulas for each future value, and then calculate the solution. Refer to the problems above for help Today Year Year 2 Year 3 Year 4 Years Solution Interest Rand Time Cash Flow FV interest factor Future Value rate 0.05 cash flow BDR years 4-5-500 Formulas: FVIF -(1) FYCFFVIF FV! - PMTFVIF Assume the interest rate is constant for all years. 4 Future Value of an Uneven Cash Flow Stream The Problem Your rich great grandfather has promised to pay you 5100 at the end of this year, $200 at the end of year for the next three year, and a certime payment of 5400 as the end of the Sith you. You could invest hfws is this cash flow stream worth to you five years from today? There is an embedded it from your way to Finance Come CPI Future Value Summation of Cash Flows Future Value Interest Farm Future Value -COMINCFICIIN-CF3N3.0733_CFNINN Numerical Slatina: F1-8+180FVIFFVIFAAAARFRIFOR PVS - 1001.0834 + 2001.B 2001.02.2016) FV5-116.05 +25194 213.33.215.20 FV5-1237.27 In Wunds The value of a cash flow of $100 in your 1.5200 in your 2.1. und 4 und 5400 l you will be worth $1,23727 at the end of the fifth you Spreadsheet Set Use formulas to find your answer by completing the PV Table: Yerd Today 0.05 Interest and 0.00 2001 PV interector Flere Fint we met alle the FV Interest Factor for each cash flow in rowd. VF-14 In cell E33 enter the formule - (l+304 udp 33 33 You must change the experts in cele 33 tech 133. 2 Then, we find the Volcach cash flow in In cell E34 enter the FV formuleCF FVF-E32E33 and 4 og 134 3 Lastly, we som the PVs to get the PV of the annuity in cell In cell 334 code the formule 34:134) 4 Your answer should be: The Fof the cash flows is $1.237.27 Now you can change any of inputs and Excel will stomatically room Test you will What is the Future Value of the literare Copy and paste (value) and then reset the table. Spreadsheet Set Moving for the Annuky Separately Today 012 Year 0.12 0.12 Interest and Time & Vino Future Value Annuity f Future Vale 1. First we mult calculate the FV Interest Factor for each cash flow in rowd. PVC- In cell E82 enter the fomnule - d+S4 and copy otrogh 12 You must change the expens in celisPeter 12 2. Then, we find the FV of the embedded annuity by clicking on cell 63. Incellier the Fantara: -FWS Test your skills: What is the Future Value of the interest rate is 5%? Copy and paste (value) and then reset the table. Spreadsheet Solution Solving for the Annuity Separately Today 0.121 Years 0.12 Solution 0.12 0.12 Year 0.12 1 100 Jard 0.12 4 200 200 200 400 a interest Rand Time Cash Flow d FV interest actor e Future Value Annuity f Future Value 1. First we must calculate the FV Interest Factor for each cash flow in rowd. FVIF-(lernt In cell E62 enter the formulu: -(1+E894 und copy to cells F62 through 162 You must change the exponents in cells P62 through 162. 2. Then, we find the FV of the embedded annuity by clicking on cell H63. In cell H63 enter the FV annuity formula: -FVYH59.3.200) or use the wizard 3. Now we can find the Future Value of three cash flows in cells E4, H64, and 164. In cell E64 enter the formula: -E61 E63 In cell H64 enter the formula: - H63*H62 In cell 164 enter the formula - 162 161 4. Lastly, we sum the FVs to get the FV of all the cash flows in cell 364 In cell 364 enter the formula: sum[E64:164) of sum[E64 +H64 +164) 5. Your answer should be: $1,313.22 is the FV of the cash flows. Test your skills In this Table, you must fill in the inputs for the interest rate, time, cash flows. Then you will write the formulas for the FV interest factor, the formulas for each future value, and then calculate the solution. Refer to the problems above for help Today Year Year 2 Year 3 Year 4 Years Solution Interest Rand Time Cash Flow FV interest factor Future Value rate 0.05 cash flow BDR years 4-5-500 Formulas: FVIF -(1) FYCFFVIF FV! - PMTFVIF Assume the interest rate is constant for all years. 4