document.write( "Question 1177373: A farmer wants to sell his small farm to a real estate agent. Determine the total amount the agent can deposit now, at 3% compounded quarterly, so that it is enough to pay $ 750,000 within 3 years. \n" ); document.write( "
Algebra.Com's Answer #850472 by CPhill(1959)\"\" \"About 
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Let's break down how to calculate the present value needed.\r
\n" ); document.write( "\n" ); document.write( "**Understanding the Problem**\r
\n" ); document.write( "\n" ); document.write( "We need to find out how much money the real estate agent needs to deposit *now* so that it grows to $750,000 in 3 years, with a 3% annual interest rate compounded quarterly.\r
\n" ); document.write( "\n" ); document.write( "**Calculations**\r
\n" ); document.write( "\n" ); document.write( "1. **Interest Rate per Quarter:**
\n" ); document.write( " * Annual interest rate: 3% = 0.03
\n" ); document.write( " * Quarterly interest rate: 0.03 / 4 = 0.0075\r
\n" ); document.write( "\n" ); document.write( "2. **Number of Quarters:**
\n" ); document.write( " * Number of years: 3
\n" ); document.write( " * Number of quarters: 3 years * 4 quarters/year = 12 quarters\r
\n" ); document.write( "\n" ); document.write( "3. **Present Value Formula:**
\n" ); document.write( " * Present Value (PV) = Future Value (FV) / (1 + interest rate)^number of periods
\n" ); document.write( " * PV = FV / (1 + r)^n\r
\n" ); document.write( "\n" ); document.write( "4. **Plug in the Values:**
\n" ); document.write( " * PV = $750,000 / (1 + 0.0075)^12
\n" ); document.write( " * PV = $750,000 / (1.0075)^12
\n" ); document.write( " * PV = $750,000 / 1.0934433068
\n" ); document.write( " * PV ≈ $685,678.62\r
\n" ); document.write( "\n" ); document.write( "**Answer**\r
\n" ); document.write( "\n" ); document.write( "The real estate agent should deposit approximately $685,678.62 now.
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