Your goal is to have $3,500 in 10 years. The rate of interest is 3% compounded annually, so how much should you start with?
$2,126.16
$2,450
$2,604.33
$2,629.60
Explanation:
Use the formula:PV=$\dfrac{FV}{(1+r)^n}$
substitute FV=3,500 ,r=3% =0.03 and n=10
PV=$\dfrac{3500}{(1+0.03)^10}$
=$\dfrac{3500}{(1.03)^10}$
=$\dfrac{3500}{1.343916}$
=2,604.328
so you should start with 2,604.33
Use the formula:PV=$\dfrac{FV}{(1+r)^n}$
substitute FV=3,500 ,r=3% =0.03 and n=10
PV=$\dfrac{3500}{(1+0.03)^10}$
=$\dfrac{3500}{(1.03)^10}$
=$\dfrac{3500}{1.343916}$
=2,604.328
so you should start with 2,604.33