You want to have $11,000 saved ten years from now. How much less do you have...

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You want to have $11,000 saved ten years from now. How much less do you have...

You want to have $11,000 saved ten years from now. How much less do you have to deposit today to reach this goal if you can earn 7% rather than 6% on your savings?

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Answer 1

Answer #1

Amount to be deposited today at 6% = 11000/1.06^10 =	$ 6,142.34
Amount to be deposited today at 7% = 11000/1.07^10 =	$ 5,591.84
Reduction in amount to be deposited today at 7%, when compared to the interest rate of 6% =	$ 550.50

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Answer 2

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