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How much would you need to deposit in an account now, such that in 5 years your account will have increased to $8,000, assuming you can earn 5% on the deposit as it grows?
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How much would you need to deposit in an account now, such that in 5 years your account will have increased to $8,000, assuming you can earn 5% on the deposit as it grows?

User Timur Osadchiy
by
3.1k points

1 Answer

5 votes

Answer:

$6268.21

Step-by-step explanation:

Future value = $8000

Interest(r) = 5%

Period (n)= 5 years

How much need to deposit?

Find the Present value:

PV = FV / (1+r)n

= 8000 / (1.05)5

= 8000 / 1.27628156

Present Value / Amount need to deposi today = $6268.21 approx

User Drasius
by
3.1k points
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