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stiks02 [169]
3 years ago
9

plan to buy a time-share in six years of $16,860. In order to have adequate funds to do so, the Walker want to make a deposit to

their money market fund today. Assume that they will be able to earn an investment rate of 5.75%, compounded annually. How much will James and Rachel need to deposit today to achieve their goal
Business
1 answer:
stellarik [79]3 years ago
4 0

Answer:

Initial investment= $12,055.22

Explanation:

Giving the following information:

Future Value (FV)= $16,860

Number of periods (n)= 6 years

Interest rate (i)= 5.75% = 0.0575

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

<u></u>

PV= FV / (1 + i)^n

PV= 16,860 / (1.0575^6)

PV= $12,055.22

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