Question

If you wish to accumulate $150,000 in 10 years, how much must you deposit today in a bank account that pays an annual interest rate of 12%

Answer 1

PV= $48,295.99

Step-by-step explanation:

Giving the following information:

Future Value (FV)= $150,000

Number of periods (n)= 10 years

Interest rate (i)= 12% = 0.12

To calculate the initial investment (PV), we need to use the following formula:

PV= FV / (1+i) n

PV= 150,000 / (1.12^10)

PV= $48,295.99