How much would you need to deposit in a savings account that earns 7%,compounded annually,to withdraw $20,000 eight years from now? (Future Value of $1,Present Value of $1,Future Value Annuity of $1,Present Value Annuity of $1. )(Use appropriate factor from the PV tables.Round your final answer to the nearest whole dollar amount. )

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Quizplus · Accepted Answer

To find the amount needed to deposit today to have $20,000 in 8 years at a 7% annual interest rate, we use the Present Value formula: PV = FV / (1 + r)^n, where FV is the future value ($20,000), r is the annual interest rate (0.07), and n is the number of years (8). Plugging in the values: PV = $20,000 / (1 + 0.07)^8 ≈ $11,640.

How Much Would You Need to Deposit in a Savings