If you want to have $10,000 for a down payment on a new car in three'...
If you want to have $10,000 for a down payment on a new car in three' years time, assuming an interest rate of 4.5 percent compounded annually, how much money do you need to deposit as a lump sum today?
A. $8712
B. $8112
C. $8650
D. $8763
Homework Answers
Present value=cash flow*Present value of discounting factor(rate%,time period)
=10000/1.045^3
=10000*0.876296604
=$8763(Approx).
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