Homework Answers
Future value after 3 years = $25000
Rate of return= 9% ; time period = 3 years
Present value = future value/(1+rate)^time
Present value = 25000/(1+0.09)^3
= 19,304.58
= $ 19,305
Thus, $19,305 is to be invested todoy in order to accumulate tge amt. Of 25,000 at tge end of 3 years.
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