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You deposit some money in the bank
You deposit some money in the bank. The interest rate is 12% in the first year, 15% in the second year, and 17% in the third year. At the end of third year, you will receive 75348 TL. What is the amount of money you have invested, today?
Expert Solution
Answer:
PV = FV / (1+ r1)n * (1+ r2)n * (1+ r3)n
PV = Present value
FV = Future value = 75348
r1 = 12% for the first year and n = 1
r2 = 15% for second year and n = 1
r3 = 17% for third year and n = 1
PV = FV / (1+ r1)n * (1+ r2)n * (1+ r3)n
= 75348 / (1+ 0.12)1 * (1+ 0.15)1 * (1+ 0.17)1
= 75348 / (1.12) * (1.15) * (1.17)
= 75348 / 1.50696
= 50000
The amount of money you should invest today is 50000
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