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Plan: Use E 1- 43 IO compute the Py of this stream of cash flows and then use Ed.4.1 to compute the FV of that
Plan: Use E 1- 43 IO compute the Py of this stream of cash flows and then use Ed.4.1 to compute the FV of that present value. To answer part (c), you need to track the new deposit made each year along with the interest on the deposits already in the bank. Execute: PV = 100 100 100 a. and b. (1.08) (1.08)2 (1.08)3 = 257.71 FV = 257.71(1.08) =324.64 Year 1: 100 c. Year 2: 100( 1.08) + 100 =208 Year 3: 208(1.08)' +100 =324.64 Evaluate: By using the PV and FV tools, we are able to keep track of our balance as well as quickly calculate the balance at the end. Whether we compute it step by step as in part (c) or directly as in part (b), the answer is the same
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