Given the following cash flows, what is the future value at year ten when compounded at an interest rate of 12.0%?
Year 0 1 5 10
Cash Flow $4,000 $3,000 $2,000 $1,000
A) $10,000.00
B) $25,267.31
C) $31,864.17
D) $11,948.32
Answer: B
Explanation: B) FV = Σ PV × (1 + r)n = $4,000 × (1.12)10 + $3,000 × (1.12)9 + $2,000 × (1.12)5 + $1,000 × (1.12)0 = $25,267.31.
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