You have an invoice for a major expenditure due in 5 years for $82,000 and the annual interest rate of 5%. How much do you need now to pay for this expenditure?

Question

You have an invoice for a major expenditure due in 5 years for $82,000 and the annual interest rate of 5%.  How much do you need now to pay for this expenditure?

drwls · Answer

(1.05)^5*X = 82,000 (assuming annual compounding) 1.2763 X = $82,000 X = $64,249