Include the following in your discussion:
- State the FV or cost of the desired item in n = 15 years.
- State he interest rate, r, you will earn on your investment (use an annual rate between 6% and 11%).
- Set up the formula and solve for the present value, PV, showing all work.
Week 7
The Present Value Formula is PV = FV/〖(1+r)〗^n ,where PV is the present value that will
amount to FV dollars in n years at interest rate r compounded annually.
For the initial post, think of something you want or need that has a future cost between $5,000
and $90,0000. For example, maybe you want to save up for your child’s college education or
maybe you want to save for a cabin on the lake. Assume you have an investment, which provides
between 6% and 11% interest compounded annually, and you want to purchase your desired item
in 15 years. What is the present value? In other words, how much money do you need to invest
today?
Include the following in your discussion:
1. State the FV or cost of the desired item in n = 15 years.
2. State he interest rate, r, you will earn on your investment (use an annual rate between 6%
and 11%).
3. Set up the formula and solve for the present value, PV, showing all work.
Follow-Up Post Instructions
Respond to at least one of your classmate.
Further the dialogue by providing more information and clarification. Minimum of 2
posts (1 initial & 1 follow-up)
• Minimum of 1 source cited
• APA format for in-text citations and list of references
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