Answer:
$66,101.45
Explanation:
To find the amount of money that you must invest today, you have to use the formula to calculate the present value:
PV=FV/(1+i)^n
PV= present value
FV= future value= 230,000
i= interest rate= 10.95%
n= number of periods of time= 12
PV=230,000/(1+0.1095)^12
PV=230,000/(1.1095)^12
PV=230,000/3.4795
PV=66,101.45
According to this, the answer is that you must invest today $66,101.45.
Answer:
The amount to be invested today, present value = $66,099.80 Explanation:
The amount to be invested today is the present of an investment of 12 years which would produce a future value of $230,000 where interest rate is 10.95%.
The formula below would be of help;
PV = FV× (1+r)^(-n)
PV - Present Value, FV- Future value, n- number of years
PV = ?, FV- 230,000 , r- 10.95%, n- 12
PV = 230,000 × (1.1095)^(-12)
PV = 66,099.80
The amount to be invested today, present value = $66,099.80
