Answer:
$3,770.53
Explanation:
Given data;
Amount Hailey invested = $2,100
annual interest rate = 8 Percent for 30 years ending 20 years from now
Aidan can make an investment for 20 years at 9 percent.
To determine how much money Aidan should invest in order to have the same amount of money in 20 years as Hailey =
First, is to determine how much Hailey will have 20 years from now:
FV20 = PV -10 × (1 + i)³⁰
FV20 = $2,100 × (1 + 0.08)³⁰
= $2,100 × 10.06266
= $21,131.59
Therefore, Aidan will have to deposit:
PV = FV20 ÷ (1 + i)N
PV = $21,131.59 ÷ (1 + 0.09)²⁰
= $21,131.59 ÷ 5.60441
= $3,770.53
