Your company just sold a product with the following payment plan: $50,000 today, $25,000 next year, and $10,000 the following year
If your firm places the payments into an account earning 10% per year, how much money will be in the account after collecting the last payment?
A) $99,000
B) $98,000
C) $88,500
D) $85,000
Answer: B
Explanation: B) FV = $50,000 × (1.10)2 + $25,000 × (1.10)1 + $10,000 × (1.10)0 = $98,000.
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