The present value P that will amount to A dollars in n years with interest compounded annually at annual interest rate r, is given by P = A (1 + r) -^n. Find the present value that will amount to $50,000 in 20 years at 8% compounded annually.

Question

The present value P that will amount to A dollars in n years with interest compounded annually at annual interest rate r, is given by P = A (1 + r) -^n.  Find the present value that will amount to $50,000 in 20 years at 8% compounded annually.

Reiny · Answer

P = 50000(1.08)^-20 = ...... On your calculator enter 50000 x 1.08 Y^X 20 ± = to get 10,727.41

Anonymous · Answer

122222