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vladimir1956 [14]
3 years ago
15

How much do I have to deposit today in order to have $5000 in 5 years if interest is 8.5% compounded annually?

Mathematics
1 answer:
alina1380 [7]3 years ago
6 0

Answer:

PV= $3,402.9

Step-by-step explanation:

Giving the following formula:

Future Vale (FV)= $5,000

Number of years (n) 5 years

Interest rate (i)= 8.5% compounded annually

<u>To calculate the initial investment (PV), we need to use the following formula:</u>

PV= FV / (1 + i)^n

PV= 5,000 / (1.085^5)

PV= $3,402.9

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