A person wants to have $3,000 available to spend on an overseas trip four years from now. If such...

Question

A person wants to have $3,000 available to spend on an overseas trip four years from now. If such funds could be expected to earn 6 percent, how much should be invested in a lump sum to realize the $3,000 when needed?

Robert · Accepted Answer

By the help of Compound interest formula CI = A*(1+i)^n 
where CI - Amt. after getting interest which is 3000 in given question because we need it after four 
years. 
A- Principal Amt(?) 
i - interest (6%) 
n - no.of years( 4 years) 3000 = x*(1+.06)^4 
x = 3000/1.262477 
x =$ 2376.28

A person wants to have $3,000 available to spend on an overseas trip four years from now. If such funds could be expected to earn 6 percent, how much should be invested in a lump sum to realize the...

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