Bob wants to invest his money into a savings account which pays 9% interest, compounded monthly. How much Bob has to deposit today to withdraw £20,000 in 9 years?
PV = FV / [1 + R]^N
PV = 20,000 / [ 1 + 0.09/12]^9*12
PV =20,000 / [ 1 + 0.0075]^108
PV =20,000 / 2.241124....
PV =8,924.09 pounds - That Bob must deposit today to get 20,000 pounds in 9 years @ 9% comp.monthly.
