how much must be invested today at an annual rate of 3% to yield $80,000 at the end of 15 years

Question

how much must be invested today at an annual rate of 3% to yield $80,000 at the end of 15 years

Answer 1

A = P*(1 + r)^t

 

Where:

A = the final amount = $80,000

P = the Principle or initial investment = the unknown

r = annual interest rate expressed as a decimal = 3% = 0.03

t = years = 15

 

$80,000 = P*(1 + 0.03)¹⁵

 

$80,000 = P*(1.03)¹⁵

 

$80,000 = P*(1.558)

 

Solve for P.