Question

You receive​ $100 today,​ $200 in one​ year, and​ $300 in two years. If you deposit these cash flows into an account earning 12​ percent, the value in the account three years from now is​ ________.

Answer 1

$628.49

Step-by-step explanation:

Cash flows Discount factor Future value

$100 1.1449 $114.49

$200 1.07 $214

$300 1 $300

Future value $628.49

The discount factor is as follows

= (1 + interest rate)^number of years

For $100 the year is 2

For $200 the year is 1

For $300 the year is 0