Calculate and rank the equivalent values eight years from now of the following cash flow streams (i) A single payment of $5000 today (ii) An ordinary annuity starting today with eight annual payments of $910 (iii) An ordinary annuity starting in three years with five annual payments of $1675 Do the...

a i FV PV1 i n 5000 108 8 925465 ii iii b Similarly at 10 compounded annua ...

Calculate and rank the equivalent values eight years from now of the following cash flow streams: (i)

Question:

Calculate and rank the equivalent values eight years from now of the following cash flow streams:
(i) A single payment of $5000 today.
(ii) An ordinary starting today with eight annual payments of $910.
(iii) An ordinary starting in three years with five annual payments of $1675.
Do the calculations and ranking for each of the following two cases:
a. Money can earn 8% compounded annually for the next eight years.
b. Money can earn 10% compounded annually for the next eight years. Annuity
An annuity is a series of equal payment made at equal intervals during a period of time. In other words annuity is a contract between insurer and insurance company in which insurer make a lump-sum payment or a series of payment and, in return,...