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    dblac018's Avatar
    dblac018 Posts: 1, Reputation: 1
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    #1

    Feb 9, 2008, 05:01 PM
    Calculate present value
    I need $50000 in 12 years. If I earn .25% per month how much do I deposit today?
    PolluxCastor's Avatar
    PolluxCastor Posts: 117, Reputation: 5
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    #2

    Feb 9, 2008, 05:58 PM
    Let's see if we can derive this formula.

    The new month's balance would be . The next month would do the same, giving a series of

    This reduces to

    Now you can solve for and substitute in the values for the original problem (being careful to treat months and percent properly).
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