Question

integral Suppose you find an account that earns ​% interest annually and you wish to have an income from the account of ​$ per year. How much must you deposit​ today

Answer 1

Answer:

We should deposit $85,000 today.

Explanation:

Future value is value of asset or security at a later date in future with incorporating the effects of growth rate. We have decided to save $85,000 which will then grow to $107,311 for Four years. The year 4 rate is 6% which will be used to compute the future value of savings.

FV = PV * $(1 + r)^{n}$

FV = 85,000 * $1.06^{4}$

Future value = 107,311