What amount must be deposited today at 10% to grow to $8 000 in three years?

Question

Quizplus · Accepted Answer

To find the present value (amount that must be deposited today) that will grow to a future value of $8,000 in three years at an interest rate of 10%, we use the formula for the present value of a single sum: PV = FV / (1 + r)^n, where PV is the present value, FV is the future value ($8,000), r is the annual interest rate (10% or 0.10), and n is the number of periods (3 years). Plugging in the values, we get PV = $8,000 / (1 + 0.10)^3 = $8,000 / (1.331) ≈ $6,010.40.

What Amount Must Be Deposited Today at 10% to Grow