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Your older sister deposited $2,000 today at 6.5 percent interest for five years. you would like to have just as much money at the end of the next five years as your sister will have. however, you can only earn 6 percent interest. how much more money must you deposit today than your sister did if you are to have the same amount at the end of the five years?

1 Answer

5 votes
Assuming simple interest:
2000*5*1.065=n*5*1.06
2130=1.06n
n=$2009.434 needs to be deposited today to match your sisters' money
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User Azder
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