For the cash flow diagram shown, the future worth in year 4 is closest to:

(a) <$2800
(b) $2915
(c) $3735
(d) $5219


P 1 = 470(P/A,7%,6) – 50(P/G,7%,6)
= 470(4.7665) – 50(10.9784)
= $1691.34
F 4 = 1691.34(F/P,7%,7) + 200
= 1691.34(1.6058) + 200
= 2715.95 +200
= $2915.95
(b) $2915

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