Question

You decide to save for your dream vacation to Europe (London, Paris, and Rome). You want to be able to travel in 8 years. If you believe your trip will cost $9,963 and you can earn 5.4 percent annual interest on your savings, how much must you deposit today so you can afford your trip in 8 years

Answer 1

$6,541.32

Step-by-step explanation:

the formula that would be used to solve this question is :

The formula for calculating present value:

FV x (1+r)^-n = P

FV = Future value = $9,963

P = Present value

R = interest rate = 5.4%

N = number of years = 8

$9,963 x (1.054)^-8 = $6,541.32