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25.07.2022 - 05:09

Suppose you want to realize a future value of $150,000 in 30 years on a investment you make. The average annual rate of return is 8.75%. What will the present value of your investment need to be?

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Suppose you want to realize a future value of $150,000 in 30 years on a investment you make. The average annual rate of return is 8.75%. What will the present value of your investment need to be?

Answers (1)

Sammie April 7, 2023 в 12:47

The present value of the investment needed to achieve a future value of $150,000 in 30 years, given an average annual rate of return of 8.75%, can be calculated using the formula for present value of a future lump sum: PV = FV / (1 + r)^n Where: PV = present value of the investment FV = future value of the investment r = average annual rate of return (as decimal) n = number of years Plugging in the values, we get: PV = 150,000 / (1 + 0.0875)^30 PV = 150,000 / 18.102 PV = $8,276.46 Therefore, the present value of the investment needed to achieve a future value of $150,000 in 30 years with an average annual rate of return of 8.75% is $8,276.46.

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