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You want to have $25,000 saved 6 years from now to buy a house. how much less do you have to deposit today to reach this goal if you can earn 5.5 percent rather than 5 percent on your savings? today's deposit is the only deposit you will make to this savings account.

Respuesta :

Aliwohaish12
The formula is
A=p (1+r)^t
A future value
P present value
R interest rate
T time

To find the present value solve the formula for p
P=A÷(1+r)^t

The present value if you can earn
5.5% is
P=25,000÷(1+0.055)^(6)
P=18,131.15

The present value if you can earn 5% is
P=25,000÷(1+0.05)^(6)
p=18,655.38

The difference
18,655.38−18,131.14
=524.24. .....answer

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