Your goal is to have $2,000 in 6 years. The rate of interest is 10% compounded annually, so how much should you start with?
$800
$1,026.32
$1,116.79
$1,128.95
Explanation:
Use the formula:PV=$\dfrac{FV}{(1+r)^n}$
substitute FV=2,000 ,r=10% =0.10 and n=6
PV=$\dfrac{2,000}{(1+0.10)^6}$
=$\dfrac{2000}{(1.10)^6}$
=$\dfrac{2000}{1.771561}$
=$1,128.947
so you should start with 1,128.95
Use the formula:PV=$\dfrac{FV}{(1+r)^n}$
substitute FV=2,000 ,r=10% =0.10 and n=6
PV=$\dfrac{2,000}{(1+0.10)^6}$
=$\dfrac{2000}{(1.10)^6}$
=$\dfrac{2000}{1.771561}$
=$1,128.947
so you should start with 1,128.95