Homework Answers
ANSWER:
FV = $1,200,000
i = 4%
pv = ?
n = 5
fv = pv * (1 + r) ^ n
1,200,000 = pv * (1 + 4%) ^ 5
1,200,000 = pv * (1.04) ^ 5
1,200,000 = pv * 1.2166
pv = 1,200,000 / 1.2166
pv = 986,312.5281
so the amount that needs to be invested is $986,312.52
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