Troy will receive $7,500 at the end of Year 2. At the end of the following two years, he will receive $9,000 and $12,500, respectively. What is the future value of these cash flows at the end of Year 5 if the interest rate is 8 percent

$33445.44

Explanation:

Fv = Pv ( 1 + R )ⁿ formula for calculating compound interest

Fv = future value

Pv = present value

R = interest rate = 0.08

n = number of years

Troy receives different cash flows at different times of the investment so to get the future value of each cash flow : substrate the number of years from the year five ( 5 ) to get the value of n for each cash flow

For $7500

n = 5 - 2 = 3

Fv = 7500 ( 1.08 )³ = 9447.84

For $9000

n = 5 - 3 = 2

Fv = 9000 ( 1.08 )² = 10497.6

For $12500

n = 5 - 4 = 1

Fv = 12500 ( 1.08 ) = 13500

the future value of these cash flows = 9447.84 + 10497.6 + 13500 = $33445.44

answer; proclamation of 1763;