Refer to the present value table information on the previous page. What amount should be deposited...
Refer to the present value table information on the previous page. What amount should be deposited in a bank today to grow to $1,000 3 years from today?
a. $1,000/0.794
b. $1,000 * 0.926 * 3
c. ($1,000 3 0.926) + ($1,000 3 0.857) + ($1,000 3 0.794)
d. $1,000 * 0.794
Homework Answers
OPTION d: $1,000 x 0.794
EXPLANATION:
$794 should be deposited in bank today to grow to $1000, 3 years from today at 8%
proof:
present value of single sum = single sum x PVF
= $1000 x 0.794
= $794
where,
PVF(8%, 3) = 0.794
Add Answer to:
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