question archive What sum deposited today at ?5% compounded annually for 10 years will provide the same amount as ?$2200 deposited at the end of each year for 10 years at 7% compounded? annually? What sum would have to be deposited today at ?5% interest compounded? annually? ?
What sum deposited today at ?5% compounded annually for 10 years will provide the same amount as ?$2200 deposited at the end of each year for 10 years at 7% compounded? annually? What sum would have to be deposited today at ?5% interest compounded? annually? ?
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What sum deposited today at ?5% compounded annually for 10 years will provide the same amount as ?$2200 deposited at the end of each year for 10 years at 7% compounded? annually? What sum would have to be deposited today at ?5% interest compounded? annually? ?
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Using financial calculator to calculate the future value
Inputs: N= 10
I= 7%
pv= 0
pmt= -2,200
fv= compute
We get, future value as $30,396.1855
Present value (amount to be deposited today)
= future value/ (1+r)^n
= 30,396.1855/ (1+0.05)^10
= 30,396.1855 / (1.05)^10
= 30,396.1855 / 1.6289
= $18,660.62
Amount to be deposited today is $18,660.62
