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You need $76,000 in 11 years. If you can earn .43 percent per month, how much will you have to deposit today?
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You need $76,000 in 11 years. If you can earn .43 percent per month, how much will you have to deposit today?

User Stuart Douglas
by
3.1k points

1 Answer

4 votes

Answer:

$ 43,135.67

Step-by-step explanation:

The amount required today is the present value of the future expected amount in 11 years computed using the present value formula below:

PV=FV/(1+r)^n*m

PV=the unknown present value

FV=$76,000

r=monthly interest rate=0.43%

n=number of years=11

m=number of months in 1 year=12

PV=$76,000/(1+0.43%)^(11*12)

PV=$76,000/(1+0.43%)^132

PV=$76,000/1.761883042

PV=$ 43,135.67

User Tkrajcar
by
3.0k points
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