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What lump some of money deposited today will grow to a future value of $9,280 at...

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.

Solutions

Expert Solution

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

jeff jeffy answered 3 years ago
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