Final answer:
To have $1.75 million in 3 years in an account with an annual compound interest rate of 2.75%, Adirondack Corporation must deposit $1,613,216.13 today.
Step-by-step explanation:
The question pertains to determining the present value of a future sum using the formula for compound interest. Adirondack Corporation needs to find out how much money should be deposited today in an account that pays a 2.75 percent interest, compounded annually, to have $1.75 million in 3 years. The formula to be used is: Present Value (PV) = Future Value (FV) / (1 + interest rate)^number of periods.
By inserting the numbers into the formula, we get PV = $1,750,000 / (1 + 0.0275)^3. After doing the math, we find that the present value, or the amount the company must deposit today, is $1,613,216.13.