How much would you need to deposit in an account now in order to have $2000 in the account in 10 years?

Question

How much would you need to deposit in an account now in order to have $2000 in the account in 10 years? Assume the account earns 5% interest compounded annually. Round your answer to the nearest cent.

Answer 1

2000=P(1+.05)^10

=P(1.05)^10

P = 2000/(1.05)^10 = $1227.83

(but with 8% current annual inflation, your "2000" dollars will be worth less than the $1227.83 invested.)