You and your sister are planning a large anniversary party 3 years from today for your parents' 50th wedding anniversary. you have estimated that you will need $6,500 for this party. you can earn 2.6 percent compounded annually on your savings. how much would you and your sister have to deposit today in one lump sum to pay for the entire party?

Based on the given above, in order to determine the present value, the amount you needed should be divided from 1 plus the 2.6 compounded annually on the savings which will be multiplied to three.

It goes as;

Present value = $6,500 / (1 + 0.026) 3 = $6,018.26

They need to deposit $6,018.26 today to pay for the entire party.

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I’ll try to check this out.