Answer:
PV= $32,009.58
Explanation:
Giving the following information:
Annual deposit= $6,000
Interest rate= 10%
Number of periods= 8 years
First, we need to calculate the future value using the following formula:
FV= {A*[(1+i)^n-1]}/i
A= annual deposit
FV= {6,000*[(1.1^8) - 1]} / 0.1
FV= $68,615.33
Now, the present value:
PV= FV/(1+i)^n
PV= 68,615.33 / (1.1^8)
PV= $32,009.58
