How much must be deposited today into the following account in order to have 35000 in 6 years for a down payment on a house? Assume no additional deposits are made.
An account with monthly compounding and an APR of 8%

$21,691.43

Explanation:

We are to determine the present value of 35,000

the formula for determining present value is :

PV = FV (1 + r)^-nm

FV = Future value  

P = Present value  

R = interest rate = 8%/ 12  

N = number of years

m = number of compounding = 12

35,000( 1 + 0.00667)^-72 = $21,691.43

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