1. Introduction

So far, we have learned how to compute the future value of investment proposals with a single initial cash flow. The next step is to look at investment proposals with multiple cash flows during their lifespan. Such proposals could be savings accounts or retirement plans, to which the investor makes annual contributions and which earn a certain rate of return. Or it could be a standard investment project considered by a firm.

While the computations generally get a bit more cumbersome, the good news is that we have already put together the necessary conceptual framework.

Let's look at a few typical situations, including:

  • Future value of investment proposals with multiple cash inflows
  • Future value of investment proposals with multiple cash inflows and outflows.