Question

Abe Frill wants to attend AVP Tech. He will need to have $15,000 seven years from today. How much should Abe put in the bank today (12% quarterly) to reach his goal in the future?

Answer 1

$6,556.15

Step-by-step explanation:

The calculation of Initial Deposit Required is shown below:-

Future value required = Present value × (1 + Rate of interest ÷ Quarterly)^Time period

15,000 = Present value(1 + 0.12 ÷ 4)^7×4

15,000 = Present value(1 + 0.12 ÷ 4)^28

Present value = $6,556.15

Therefore, for computing the initial deposit required simply we applied the above formula and the initial deposit required = $6,556.15.