In: Finance
What lump some of money deposited today will grow to a future value of $9,280 at 9 3/4% compounded monthly for 2 1/2 years? Please show work.
Sol:
Future value (FV) = $9,280
Interest rate = 9 3/4% = 9.75%, Monthly = 9.75 / 12 = 0.8125%
Period (NPER) = 2 1/2, Monthly = 2.5 x 12 = 30
To determine lump some (Present value) of money deposited today we can use PV function in excel:
FV |
$9,280 |
Interest rate |
0.8125% |
NPER |
30 |
PV |
$7,279.75 |
Therefore lump some of money (Present value) deposited today will be $7,279.75
Working