I plan to spend $5,000 in a year. If the interest rate is 5% per year,...

I plan to spend $5,000 in a year. If the interest rate is 5% per year, how much should I save today?

Expert Solution

Present value=$5000*Present value of discounting factor(5%,time period)

$5000/1.05

=$5000*0.952380952

which is equal to

=$4761.90(Approx)(Please note that intermediate calculations have not been rounded off].

jeff jeffy answered 2 years ago

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