okmarks People WindowHelp Secure I homeworkld 485037818quest

okmarks People WindowHelp Secure I homeworkld 485037818&questionld-; 18lushed false&cld; 4842281&centerw; SAM 3100 Online Spring 2017-2018 Abby Neff 1/27/18 131 AM Homework: Chapter 3 Homework Save Score: 0 of 1 pt 16 of 16/14 complete) Hw Score: 63.1%, 13.25 of 21 pt P 3-23 (similar to) Question Help * Your cousin is currenty 8 years old. She will be going to college in 10 years. Your aunt and uncle would ike to have $105,000 in a savings account to fund he educaton at tat tre the aocont promises to pay a tod interest rate of 45% per yua·how much morey do they need to put into the unt today to ensure that they will have $105,000 in 10 yearh? The amount they need to put away today is S(Round to the nearest cent .·s* 1.1 -fil:/ \". ;(KU) More Enter your aswer in the answer box and then click Check Answer All parts showing

Solution

Cousin What your aunt and uncle want to know is what is the present value of $105,000 in 10 years, discounted at 4.5% annually. Most likely they do not think of this decision in these terms and do not use or understand this terminology. Execute: PV = 105000 / (1.045)^10 = 67612.42 PV $67,612.41 PV(4.5%,10,0,-105000)