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Future value of the total amount of money

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Reference no: EM132558390

It is summer and your retail shop's business is seeing poor sales (the college population has gone home for the summer). To conserve cash fl ow, you ask each of your four employees to kindly take a $100 pay cut per person per month for the three months of summer (June to August). You promise to pay them back in December when you would have lots of cash; plus you will give them an additional bonus of $100 per person. Draw the cash-fl ow diagram; show the future value of the total amount of money you would have to pay back in December to all your employees should they accept your proposal. (Use an interest rate of 12% in your calculations, and assume monthly compounding between the end of August and December)

Reference no: EM132558390

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