I came across this example in the Elan notes and I can’t seem to get the right answer with my hp12c. Compute the future value, as of the end of year 6, of the uneven cash flow stream given in the table below. Assume that the periodic discount rate is 5% Year 0 - $0 Year 1 - ($1,500) Year 2 - ($500) Year 3 - ($2,000) Year 4 - $0 Year 5 - $3,000 Year 6 - $2,500 So before figuring out FV you need to figure out NPV and this is the part that’s hanging me up. I’m typing in 0 as CF0 and then the rest of the figures as CFj. Then I type 5 in as i and the compute NPV. I’ve done this a bunch of times and I keep getting $606.36. The instructor gets $4,061.71 which I did get once but I’m not sure what I did differently that time. Any help is appreciated!
$606.36 is the correct present value.
$812.57 (= $606.36 × 1.05^6) is the correct _ future value _.
The instructor did something terribly wrong.
That was driving me crazy. I did just figure out where his number came from too. In the printed lecture notes year 3 is negative 2k and his presentation it is positive 2k. Thanks for the help!
That’d do it. Then the present value would be $4,061.71; the _ future value _ would be $5,443.07 (= $4,061.71 × 1.05^6).
My pleasure.