A contractor plans to purchase a pickup. Select the correct equation and factor to determine if...

A contractor plans to purchase a pickup. Select the correct equation and factor to determine if a contractor plans to purchase a pickup truck in 10 years, how much should the contractor invest at 10% interest today to have the $55,000 needed to purchase the truck at the end of 10 years?

Select one:

a. 15,000

b.11,580

c. 18,630

d.21,230

Expert Solution

Present Value = Future Value / (1+interest rate)^{number of
years}

Therefore, Present Value = 55000 / (1+0.10)¹⁰

Therefore, Present Value = 21204

Therefore option d 21230 is correct.

jeff jeffy answered 2 years ago

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