Question

4.B.83

How much must be deposited today into the following account in order to have get 35,000 in 5 Years
An account with monthly compounding and an APR of 4%
should be deposited today.
(Do not round until the final answer. Then round to the nearest cent as needed)

Answer 1

$ 28,665.11 must be deposited today into the account.

Explanation:

Given that there is an account with monthly compounding and an APR of 4%, to determine how much must be deposited today into the following account in order to have $ 35,000 in 5 years, the following calculation must be performed:

X x (1 + 4/12) ^ 5x12 = 35,000

X x (1 + 0.333) ^ 60 = 35,000

X x (1,333) ^ 60 = 35,000

X x 1.220999 = 35,000

X = 35,000 / 1.22099

X = 28,665.11

Thus, $ 28,665.11 must be deposited today into the account.