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Mr. Smith wishes to retire in 16 years. When he retires he would like to have $300,000 in his bank account. Mr. Smith's bank pays 8% per year compounded annually. How much should he deposit now to attain his goal?

Respuesta :

Answer:

$87,567.14

Explanation:

For computing the amount deposited for attaining the goal we need to apply the present value which is to be shown in the attachment

Provided that,  

Future value = $300,000

Rate of interest = 8%

NPER = 16 years

PMT = $0

The formula is shown below:

= -PV(Rate;NPER;PMT;FV;type)

So, after applying the above formula, the present value is $87,567.14

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