Information provided:
Future value= $13,500
Time= 12 years*2= 24 semi-annual periods
Interest rate= 5.70%/2= 2.85% per semi-annual period
The question is solved by computing the present value.
Enter the below in a financial calculator to compute the present value:
FV= 13,500
N= 24
I/Y= 2.85
Press the CPT key and PV to compute the present value.
The value obtained is 6,877.5010.
Therefore, she will have to invest $6,877.50 today to achieve her goal.
In case of any query, kindly comment on the solution.
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