5. How much would you need to deposit into an account earning 5.5%, compounded monthly, so...

Question

Question

Answer 1

Answer #1

$6,000 is the FV of the amount to be deposited today [PV], the
interest rate being 5.5%/12 per month and the period of deposit
being 7*12 = 84 months.
So, 6000 = PV*(1+0.055/12)^84
Therefore, PV = 6000/(1+0.055/12)^84 =	$ 4,086.30
Answer: $4,086.30

Answer 2

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