document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=65735>Question 65735</A>: <I><SPAN STYLE=\"word-break: break-all;\"> Future Value the concept called Present value You want to buy a new car in 5 years and estimate you need $20,000.00.If the bank pays you 6% interest rate how much do you need to put in the bank today? I need step by step instructions of how to get the answer. The book gives the answer which is present value = $14,945.00 but no steps on how to get there. Thank you and have a nice day. This question came from an accounting business class online called The Kaplan E Guide to Business </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #46436 by </B><A HREF=/tutors/aboutme.mpl?userid=uma><B>uma(370)</B></A><img src=\"/images/stars/stars-10.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=uma><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/images/nopicture.jpg><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=46436\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> When the present value is given, the future value is calculated using the formula:\r<BR>\n" );
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document.write( "FV = PV(i+r)^n\r<BR>\n" );
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document.write( "Here FV = 20000<BR>\n" );
document.write( "r = 0.06<BR>\n" );
document.write( "n = 5\r<BR>\n" );
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document.write( "==> 20000 = PV(1+0.06)^5<BR>\n" );
document.write( "==> 20000 = PV(1.06)^5<BR>\n" );
document.write( "==> 20000 = PV(1.3382)<BR>\n" );
document.write( "==> 20000/1.3382 = PV<BR>\n" );
document.write( "==> 14945.4 = PV\r<BR>\n" );
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document.write( "Thus the present value = $ 14945\r<BR>\n" );
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document.write( "Good Luck!!!<BR>\n" );
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