FW=$935 seems too far out. I get something close to FW=$310.10 & PW=$286.37 but not sure.
Hi.
This is the problem.
I tried to find the FW first. I see the problem as "I deposite an initial money PW, and on the 4th, 5th, 6th and 7th I deposited $100". How much do I get at the end of the eighth year with i = 0.12.
That's how I interpret it.
I started by finding PW
which gives me 63.55 + 45.56 + 50.66 + 45.23 = 205. The outflow on is 40.39.
Either using 205 or 205-40.39, and then multiple that by (1 + 0.12) ^ -8 to get the PW, I either get 82.79 or 66.4832.
I kinda have the answer. I think the PW is 175.8 and FW is 935.28.
How do I get PW? What's wrong with my calculation?
Thanks
Where does PW and FW come from? Should be PV (Present Value) and FV (Future Value).
FV = 100(1.12^4 + 1.12^3 + 1.12^2 + 1.12^1 + 1.12^0) = 635.28
PV = FV / 1.12^8 = 635.28 / 1.12^8 = 256.58
Pretty basic stuff: where were you stuck?
In case this helps; what "it looks like":
Code:Y INTEREST BALANCE DEPOSIT INTEREST BALANCE 0 256.58 .00 1 30.79 287.37 .00 2 34.48 321.85 .00 3 38.63 360.48 .00 4 43.25 403.73 100.00 .00 100.00 5 48.45 452.18 100.00 12.00 212.00 6 54.27 506.45 100.00 25.44 337.44 7 60.77 567.22 100.00 40.49 477.93 8 66.06 635.28 100.00 57.35 635.28