Problema Solution
The amount a person would need to deposit today with a 5 percent interest rate to have $2000 in three years.
Answer provided by our tutors
P = the principal of the amount the person needs to deposit
r = 0.05 or 5% interest rate
t = 3 years
A = $2,000 the future value
A = P(1 + r)^t
P = A/(1 + r)^t
P = 2000/(1 + 0.05)^3
P = $1,727.68
The person needs to deposit $1,727.68 today.