A devoted Indiana basketball fan needs $14,000.00 to attend the Final Four exactly one year from...
A devoted Indiana basketball fan needs $14,000.00 to attend the Final Four exactly one year from today. If the fan can earn 7.00% annually on his investments, how much should he set aside today?
Homework Answers
We use the formula:
A=P(1+r/100)^n
where
A=future value
P=present value
r=rate of interest
n=time period.
14000=P(1.07)
P=$14000/1.07
=$14000*0.934579439
which is equal to
=$13084.11(Approx).
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