What sum deposited today at 5% compounded annually for 8 years will provide the same amount...

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What sum deposited today at 5% compounded annually for 8 years will provide the same amount as $2400 deposited at the end of

Answer 1

Answer #1

Future value = Annuity * [(1 + r)n - 1] / r

Future value = 2400 * [(1 + 0.08)8 - 1] / 0.08

Future value = 2400 * [1.85093 - 1] / 0.08

Future value = 2400 * 10.636628

Future value = 25,527.90631

Presnet value = Future value / (1 + r)n

Presnet value = 25,527.90631 / (1 + 0.05)8

Presnet value = 25,527.90631 / 1.477455

Presnet value = $17,278.29

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Answer 2

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