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24 May, 03:09

You want to have $13,000 in 9 years for a dream vacation. If you can earn an interest rate of. 4 percent per month, how much will you have to deposit today?

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  1. 24 May, 03:30
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    PV = $8,447

    Explanation:

    Giving the following information:

    Future value = $13,000

    Number of months = 9*12 = 108

    Interest rate = 0.4/100 = 0.004 compounded montlhy

    To calculate the initial investment required, we need to use the following formula:

    PV = FV / (1+i) ^n

    PV = 13,000 / (1.004^108)

    PV = $8,447
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