Construct the cash flow diagram from his point of view

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Reference no: EM131985464

A small business owner plans to make an initial investment now into a fund that pays 6% per year compounded yearly.

He wants to use this initial investment plus interest to produce $545 per month ($6, 540 per year) to pay for office expenses over a four (4) year period.

He intends to start drawing money from the investment at the first year following year four (4).

Construct the cash flow diagram from his point of view. How much money must he invest initially (now, at year 0) to produce the required cash flow?

Reference no: EM131985464

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