Question

How much would you have had to invest now in an account paying 8% / year to to have $20,000 in 21 years

Answer 1

PV= $3,978.115

Step-by-step explanation:

Giving the following information:

Interest rate (i)= 8% = 0.08

Future value (FV)= $20,000

Number of periods (n)= 21 years

To calculate the lump-sum to be invested today, we need to use the following formula:

PV= FV / (1 + i)^n

PV= 20,000 / (1.08^21)

PV= $3,978.115