Given the following cash flows, what is the future value at year six when compounded at an interest rate of 8.0%?
Year 0 2 4 6
Cash Flow $5,000 $7,000 $9,000 $11,000
A) $38,955.39
B) $56,687.43
C) $42,074.42
D) $32,000.00
Answer: A
Explanation: A) FV = Σ PV × (1 + r)n = $5,000 × (1.08)6 + $7,000 × (1.08)4 + $9,000 × (1.08)2 + $11,000 × (1.08)0 = $38,955.39.
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