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Sagot :
The amount of $12,000 is required to be invested today in order to receive $28,000 after 11 years of 8 %.
What is an investment?
Investment is an amount made by an entity to get benefits in upcoming years. It can be for a short time or a long time where a shorter investment is treated as a current asset and a longer investment consider a non-current asset.
Given values:
Invested amount = $28,000
Time period = 11 years
Interest rate = 8%
Computation of worth of investment today:
[tex]\rm\ Worth \rm\ of \rm\ investment\rm\ today ={\rm\ Invested \rm\ Amount}\times \frac{1}{(1+ Interest rate)} ^{\rm\ Time \rm\ period} \\\rm\ Worth \rm\ of \rm\ investment \rm\ today ={\$28,000} \times \frac{1}{(1+ 0.08)} ^{11} \\\\\rm\ Worth \rm\ of \rm\ investment \rm\ today={\$28,000} \times{0.4288} \\\\ \rm\ Worth \rm\ of \rm\ investment \rm\ today=\$12,000.864[/tex]
Therefore, the amount of $12,000 should be invested today to get $28,000 after 11 years at 8%.
Learn more about the investment here:
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