Question

You need to have $33,250 in 20 years. You can earn an annual interest rate of 4 percent for the first 6 years, 4.6 percent for the next 5 years, and 5.3 percent for the final 9 years. How much do you have to deposit today

Answer 1

The amount needed to be deposited today = $13184.93

Step-by-step explanation:

From the given information;

You need to have $33,250 in 20 years.

Annual interest rate :

4 percent for the first 6 years

4.6 percent for the next 5 years

5.3 percent for the final 9 years

The amount needed to be deposited today =

`(33250)/((1+(4)/(100))^6 * (1+(4.6)/(100) )^5 * (1+(5.3)/(100) )^9 )`

The amount needed to be deposited today =
`(33250)/((1+0.04)^6 * (1+ 0.046 )^5 * (1+0.053 )^9 )`

The amount needed to be deposited today =
`(33250)/((1.04)^6 * (1.046 )^5 * (1.053 )^9 )`

The amount needed to be deposited today =
`(33250)/(1.265319018 * 1.252155953 * 1.591678466 )`

The amount needed to be deposited today = $13184.93