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BartSMP [9]
4 years ago
5

An investor wishes to have $1,000 available in five years. How much should be invested today, if the current interest rate is 5

percent (round to the nearest dollar)
Business
1 answer:
oksian1 [2.3K]4 years ago
6 0

Answer:

The necessary investement today is $783.53

Explanation:

Giving the following information:

An investor wishes to have $1,000 available in five years. The interest rate is 5%.

We need to use the following formula:

PV= FV/(1+i)^n

FV= 1000

i=0.05

n=5

PV= 1,000/(1.05)^5= $783.53

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