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You would like to have $10,000 in an account after eight years' time

Accounting Nov 26, 2020

You would like to have $10,000 in an account after eight years' time.

If the account earns 2.5% compounded interest yearly, how much would you have to deposit today?

$8,333

$9,765

$8,207

$9,464

Expert Solution

Present value = Future value / (1 + r)ⁿ

here given;

Future value= 10000

r= 2.5%

n= 8 years

Put the values in the formula;

= $10,000 / (1+2.5%)⁸

= $ 8207

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