Question

You are planning a special wedding three years from today. You don’t know who your spouse will be but you do know that you are saving $25,000 today and $35,000 one year from today for this purpose. You also plan to pay the final $45,000 of costs on your wedding day. At a discount rate of 7 percent, what is the current cost of your special wedding?

Answer 1

current cost of your special wedding = $94,444

Step-by-step explanation:

given data

saving = $25,000

saving = $35,000

pay final = $45,000

discount rate = 7 %

to find out

current cost of your special wedding

solution

we find here Current cost of your special wedding that is express as

current cost of your special wedding = saving +
`(saving)/((1+rate))` +
`(pay final)/((1+rate)^3)` ...............................1

put here value we get

current cost of your special wedding = 25,000 +
`(35,000)/((1+0.07))` +
`(45000)/((1+0.07)^3)`

current cost of your special wedding = $94,444