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A man nearing retirement wants to invest some money in a fund that compounds annually at a rate of 6 percent, so that in five years, he will have at least $100,000. How much money must he invest now to make that happen?

 Dec 11, 2019
 #1
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FV=PV(1+i)n   

FV=future value = 100 000

PV=present value= amount to invest now

i = interest rate in decimal form = .06

n = # compounding periods = 5 for this question

 

Plug in the numbers and solve for PV....

 Dec 12, 2019
 #2
avatar+188 
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is it 74725.82? i plugged in the values and got a longer decimal, but i rounded

atlas9  Dec 13, 2019

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