Answer:
PV= $73,201.14
Step-by-step explanation:
Giving the following information:
Future value (FV)= $85,000
Number of periods (n)= 20 months
Interest rate (i)= 0.03/4= 0.0075
To calculate the lump-sum required to reach the objective, we need to use the following formula:
PV= FV / (1 + i)^n
PV= 85,000 / (1.0075^20)
PV= $73,201.14
