Sara wants to have $ 580 comma 000 in her savings account when she retires. How much must she put in the account now, if the ac
count pays a fixed interest rate of 10%, to ensure that she has $ 580 comma 000 in 18 years time?
1 answer:
Answer:
$104,318.10
Explanation:
For computing the putting amount now i.e present value we have to applied the present value formula i.e to be shown in the attachment below:
Given that,
Future value = $580,000
Rate of interest = 10%
NPER = 18 years
PMT = $0
The formula is shown below:
= -PV(Rate;NPER;PMT;FV;type)
So, after solving this, the present value is $104,318.10
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