To calculate the amount that needs to be deposited today to have $70,000 in 7 years with an APR of 6.1%, we can use the compound interest formula:
A = P(1 + r/n)^(nt)
Where:
A = the final amount
P = the principal (the amount deposited today)
r = the annual interest rate (as a decimal)
n = the number of times per year that the interest is compounded
t = the number of years
In this case, we have:
A = $70,000
r = 6.1% = 0.061
n = 1 (since the interest is compounded annually)
t = 7
Solving for P, we get:
P = A / (1 + r/n)^(nt)
P = $70,000 / (1 + 0.061/1)^(1*7)
P = $70,000 / (1.061)^7
P = $70,000 / 1.50363
P ≈ $46,566.67
Therefore, you would need to deposit approximately $46,566.67 today to have $70,000 in 7 years with an APR of 6.1%.
