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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?

Guest Mar 29, 2017
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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.

Guest Mar 29, 2017

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