4. Suppose your retirement goal is to accumulate $400 in 2.5 years. How much do you need to deposit in the bank today to meet your goal if the bank offers an interest rate 5.65%? a. $321 b. $336 c. $482 d. $293 e. $349
Required Future Value = $ 400, Tenure of Investment = 2.5 years, Interes Rate = 5.65%
Let the required deposit today be $ K
Therefore, K x (1.0565)^(2.5) = 400
K = 400 / (1.0565)^(2.5) = $ 348.647 ~ $ 349
Hence, the correct option is (e)
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