Homework Answers
Your required answer is option A i.e. $72,697
Explanation:
To calculate the deposit amount today use the formula of Present Value (PV) in excel:
Where:
rate = 3.25%
nper = 20 years
pmt = $1000 X 5 Employee = $5,000 (use - sign before this since this is an outflow)
fv = $0
type = 0 (for end of the period)
So your final answer is $72,697 (Rounded off)
I hope this clear your doubt.
Feel free to comment if you still have any query or need something else. I'll help asap.
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