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You want to have $11,500 in 9 years for a dreamvacation. If you can earn...

You want to have $11,500 in 9 years for a dream vacation. If you can earn an interest rate of .8 percent per month, how much will you have to deposit today?

Solutions

Expert Solution

The amount is computed as follows:

Present value = Future value / (1 + r)n

So, the amount will be computed as follows:

= $ 11,500 / (1 + 0.008 / 12) 9 x 12

= $ 11,500 / 1.0006666667108

= $ 10,701.36 Approximately

jeff jeffy answered 2 years ago
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