Question

Compute the amount of money to be set aside today to ensure a future value of $2,300 in 1 year if the interest rate is 6.5% annually, compounded annually.

Answer: The amount of money to be set aside is $ . (Round to the nearest cent as needed.)

Answer 1

2159.62

Explanation:

Given that future value of 2300 dollars after a period of 1 year

Interest rate =6.5%

Period = 1 year

Compounded = annually

Hence we have the final value as

`2300=P(1+(6.5)/(100) )\\2300=1.065P\\P = (2300)/(1.065) \\=2159.62`