Problem
Consider the cash flow shown below for deposits into and withdrawals from an account. The account yields 4% annual interest for the first three years, 6% annual interest for the next three years and 8% annual interest for the last year.
1. Compute the present worth of this cash flow. Round to the nearest dollar.
2. Compute the future worth of this cash flow. Round to the nearest dollar.
3. Suppose that the CF for year 3 is X instead of -$1500. How much would X need to be to make the present value of this CF $2000? Round to the nearest dollar.