You will need 50,000 each year beginning next year for 5 years. How much you need to deposit now if the bank will offer you 5% compound interest rate?
Use this formula to calculate the PV:
PV=P{[1 + R]^N - 1.[1 + R]^-N} R^ - 1
PV =50,000 x {[1.05]^5 - 1 / [1.05^5] / 0.05}
PV =50,000 x 4.32947667.......
PV =$216,473.83 - This is what you must deposit now.
P.S. The payments of $50,000 begin at the END of the year.
