Question

Sara wants to have $ 580 comma 000 in her savings account when she retires. How much must she put in the account​ now, if the account pays a fixed interest rate of 10​%, to ensure that she has $ 580 comma 000 in 18 years​ time?

Answer 1

Answer:

$104,318.10

Explanation:

For computing the putting amount now i.e present value we have to applied the present value formula i.e to be shown in the attachment below:

Given that,  

Future value = $580,000

Rate of interest = 10%

NPER = 18 years

PMT = $0

The formula is shown below:

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

So, after solving this, the present value is $104,318.10