Question 1035882

please help me I never and still isn't good on doing these problems. Thanks in advance. 

How much you must deposit in an account that pays 6.25% interest, compounded annually to have a balance of $700.00 after 2 years.
<pre>Use the formula for the PRESENT VALUE of $1: {{{P = A/(1 + i/m)^mt}}}. where:
P = Present Value (unknown in this case)
A = Future Value ($700, in this case)
i = Interest rate (6.25%, or .0625, in this case)
m = Compounding periods, per year (anuually, or 1, in this case)
t = Time, in years (2, in this case)

Therefore, {{{P = A/(1 + i/m)^(mt)}}} becomes: {{{P = 700/(1 + .0625/1)^(1*2)}}} ======> {{{P = 700/(1 + .0625)^2}}} =======> {{{P = 700/(1.0625)^2}}}
P, or Present Value/Deposit to be made now = {{{highlight_green(matrix(1,3, "$620.0692042", or, "$620.07"))}}}