Jane wishes to make a deposit now into an account that pays 3% compounded annually with the goal of having $12,000 available at the end of 10 years. What deposit it required now? Round to the nearest penny. Use the table on page 395.
Homework Answers
Future Value required = $12,000
Interest Rate = 3%
Time Period = 10 years
Using Table,
At 3% rate and on period 10,
Value = 0.74409
Deposit Required today = 12,000(0.74409)
Deposit Required today = $8,929.08
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