Draw the cash flow diagram


Over the last twelve years, you have been making monthly payments on a 30 year, $80,000 home loan at 8% interest compounded monthly. You have just won $100,000 while on a riverboat gambling cruise in Dubuque, Iowa.

a. Draw the Cash Flow Diagram (neatly Ac with a straight edge; and label all values, and time increments). Or, you may draw this using EXCEL.

b. If $20,000 will go to pay income taxes on the winnings, will you have enough left over to pay off the loan on your home?

HINT: Calculations maybe the simplest if you use the formulas factor OR use EXCEL to calculate the Uniform Series and the Present Worth values.

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Accounting Basics: Draw the cash flow diagram
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