Answer:
$20,468.86 more if you wait
Explanation:
This is a time value of money question. You need to calculate the one time cashflow deposit (PV) as of today and as of 5 years and find the difference between the two.
<u>As of today</u>
Using a financial calculator, input the following;
Future value (FV) = 1,250,000
Interest rate (I/Y) = 7.6%
Duration of investment (N) = 45
Recurring payment (PMT) = 0
then compute PV = $<em>46,276.21</em>
<u>As of year 5,</u>
Future value (FV) = 1,250,000
Interest rate (I/Y) = 7.6%
Duration of investment (N) = 45 - 5 = 40
Recurring payment (PMT) = 0
then compute PV = $66,745.07
Therefore, you will pay (66,745.07 - <em>46,276.21) = $20,468.86 more if you wait</em>