How much money would you need to invest today in order to have a lump sum of $40,000 in 18 years if the available interest rate is 8.5% compounded annually?
Please find below solution..
| we have to use financial calculator to solve this problem | |||||
| Put in calculator | |||||
| FV | 40000 | ||||
| PMT | 0 | ||||
| N | 18 | ||||
| I | 8.50% | ||||
| Compute PV | ($9,211.38) | ||||
| Therefore need to invest = | $9,211.38 | ||||
How much money would you need to invest today in order to have a lump sum...