Question

calculating present values you need $85,000 in 10 years. if you can earn .65 percent per month, how much will you have to deposit today?

Answer 1

Answer:

The correct answer is $39,062.98.

Explanation:

According to the scenario, the given data are as follows:

Future value (FV) = $85,000

Time period (t) = 12 months × 10 years = 120 months

Interest rate (r) = 0.65% per month

So, we can calculate the present value by using following formula:

Present value = Future Value ( 1 / (1+r))^t

= 85000 × (1 / (1+0.65%))^120

= $39,062.98

Hence the present value that has to be deposit today is $39,062.98