Own tax Teturn? Assume she can earn 3 percent on her savings. 8. Calculating the Time Value of Money for Savings Goals. If you desire to have $20,000 for a down payment for a house in five years, what amount would you need to deposit today? Assume that your money will earn 4 percent. LO1-4
Own tax Teturn? Assume she can earn 3 percent on her savings. 8. Calculating the Time Value of Money for Savings Goals. If you desire to have $20,000 for a down payment for a house in five years, what amount would you need to deposit today? Assume that your money will earn 4 percent. LO1-4
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question 8
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Step 1
Future value of an investment today is $20,000 after a time period of 5 years and an interest rate of 4%.
Using the Present Value formula:
Answer: An investment of $16,438.54 should be made today.
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