If you wish to have $800 in a savings account at the end of 4 years,...

If you wish to have $800 in a savings account at the end of 4 years, and 5% interest will be paid annually, how much should you put into the savings account now?

Solutions

Expert Solution

PV=FV*(1+i)^(-n)

PV=present value

FV=future value=800

i=interest rate =5%

n=years=4

PV=800*(1.05^(-4))

=658.16198

The amount is $658.16

Rahul Sunny answered 1 year ago

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