Question

how much money should be deposited today in an account that earns 6.81% compounded annually so that it will accumulate to $35,250 in 21 years?
use this formula:
$pv = \frac{fv}{(1+\frac{r}{n})^{nt}}$
enter the dollar amount rounded up to the nearest cent.
your answer:

Explanation:

Step1: Identify given values

$FV = 35250$, $r = 0.0681$, $n = 1$, $t = 21$

Step2: Substitute into present value formula

$PV = \frac{35250}{(1+\frac{0.0681}{1})^{1 \times 21}}$

Step3: Simplify denominator exponent

$PV = \frac{35250}{(1.0681)^{21}}$

Step4: Calculate denominator value

$(1.0681)^{21} \approx 3.9774$

Step5: Compute present value

$PV = \frac{35250}{3.9774} \approx 8862.52$

Step6: Round up to nearest cent

Since the calculated value is already to the nearest cent, no further rounding up is needed.

Answer:

$\$8862.52$