Question

You want to have $19,000 in 7 years for a dream vacation. If you can earn an interest rate of .3 percent per month, how much will you have to deposit today

Answer 1

Initial investment= $14,773.22

Step-by-step explanation:

Giving the following information:

Future value (FV)= $19,000

Number of periods (n)= 7*12= 84 months

Interest rate (i)= 0.003

To calculate the initial investment (PV), we need to use the following formula:

PV= FV / (1 + i)^n

PV= 19,000 / (1.003^84)

PV= $14,773.22