Economic help! how do you do this?

Question

Compute the ANNUAL worth of the following cash flows using 15% interest

Year------

year---0 --5,000

years---1-4 ----1,000

year 5 ---------------------900

year6 ---------------------800

year7 ------------------700

year8 -----------------600

year9 -----------------500

year10 --------------400

A--- 1789

B--- 1863

C--- 1957

D ---2078

Answer 1

OK, so you are starting out with $5,000.  Year 1 earned 15% interest, so multiply $5,000 by 1.15, and add the $1,000 you get for year 1.  

Each year, just take the previous years balance, multiply by 1.15, and add the next years cash.

good luck