Rick wants to have earned $10,000 at the end of 6 years . How much must he depos

Question

Rick wants to have earned $10,000 at the end of 6 years . How much must he depost today in order to do so , if his rate of interest is fixed at 8% compounded annually? Rick wants to have earned $10,000 at the end of 6 years . How much must he depost today in order to do so , if his rate of interest is fixed at 8% compounded annually? Rick wants to have earned $10,000 at the end of 6 years . How much must he depost today in order to do so , if his rate of interest is fixed at 8% compounded annually?

Explanation / Answer

Answer :

Amount : $10,000

Rate of Interest = 8%

Duration = 6 Years

Formula A = P (1 + r/n) ^ nt

     10,000    = P ( 1 + 0.08 / 1 ) 1.6

     10,000   = P . 1.086

      10,000 = P . 1.586874

           P       = $ 6301.7    

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