Washington Co. will receive $5,400 at the beginning of each quarter for the next four years, beginning today. Assume an interest rate of 12%. What is this future stream of cash flows worth today (round up to nearest dollar amount)?

Finance 3101 Formulas - Selected

Brooks Financial Management)

CHAPTER 3

1. FV_n = PV₀(1 + r)ⁿ
2. PV₀ = FV_n / (1 + r)ⁿ
3. n = ln (FV/PV) / ln (1 + r) [Rule of 72: n (yrs.) 72 / r (annual %)]
4. r = (FV_n/PV₀)^(1/n) 1 [Rule of 72: r (annual %) 72 / n (yrs.)]

CHAPTER 4

1. FVA_n = PMT [((1 + r)ⁿ - 1) / r]
2. PVA_t = PMT_(t+1) [(1 - 1/(1 + r)ⁿ) / r]
3. PVP_t = PMT_(t+1) / r

Group of answer choices

$37,660

$18,370

$20,675

$67,830

$69,865