Answer:
Total Present value = $923.98
Total Future Value = $1,466.23
Step-by-step explanation:
Given data:
total investment for next three year is $100
total investment for 4th year $200
total investment for 5th year $300
total investment for 6th year $500
Present value is calculated as
Year 1
[tex]\frac{ 100}{(1.0 + .08)} = $ 92.59[/tex]
Year 2
[tex]\frac{100}{(1.0 + .08)^2} = $ 85.73[/tex]
Year 3
[tex]\frac{100}{(1.0 + .08)^3} = $ 79.38[/tex]
Year 4
[tex]\frac{200}{(1.0 + .08)^4}= $147.01[/tex]
Year 5
[tex]\frac{300}{(1.0 + .08)^5}= $204.17[/tex]
Year 6
[tex]\frac{500}{(1.0 + .08)^6}= $315.08[/tex]
Total Present value = $923.98
future value calculation:
Year 1
[tex]100 \times (1.0 + .08)^5 = $146.93[/tex]
Year 2
[tex]100 \times (1.0 + .08)^4 = $136.05[/tex]
Year 3
[tex]100 \times (1.0 + .08)^3 = $125.97[/tex]
Year 4
[tex]200 \times (1.0 + .08)^2 = $233.28[/tex]
Year 5
[tex]300 \times (1.0 + .08)^1 = $324.00[/tex]
Year 6
[tex]500 \times (1.0 + .08)^0 = $500.00[/tex]
Total Future Value = $1,466.23
