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wel
3 years ago
14

Your sister just deposited $5,500 into an investment account. She believes that she will earn an annual return of 8.8 percent fo

r the next 6 years. You believe that you will only be able to earn an annual return of 8 percent over the same period. How much more must you deposit today in order to have the same amount as your sister in 6 years
Business
1 answer:
valentinak56 [21]3 years ago
6 0

Answer:

$5749.02

Explanation:

The first step is to determine the future value of my sister's deposit

The formula for calculating future value:

FV = P (1 + r)^n

FV = Future value  

P = Present value  

R = interest rate  

N = number of years

5500 (1.088)^6 = $9122.97

the second step is to determine the present value of  $9122.97 using an interest rate of 8%

$9122.97 / (1.08)^6 = $5749.02

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