Question

If you desire to have $25,000 for a down payment for a house in eight years, what amount would you need to deposit today? g Assume that your money will earn 6 percent.

Answer 1

Answer:

$15,685.31

Explanation:

We use the present value formula to find out the deposit amount for today. The calculation part is shown in the spreadsheet. Kindly find the attachment below.

Data provided in the question

Future value = $25,000

Rate of interest = 6%

NPER = 8 years

PMT = 0

The formula is shown below:

= -PV(Rate;NPER;PMT;FV;type)

So, after solving this, the present value is $15,685.31