How much would you need to deposit today in order to be able to withdraw $2,500 in 2 years and $1,500 in 5 years, if the account has nothing in it today and interest is 8% per year, compounded annually?
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A. B. C. D. E.C
Work this question as two compound interest problems. On the BAII Plus, press 2 N, 8 I/Y, 0 PMT, 2500 FV, CPT PV, which yields $2,143.35. Then press STO 1.
Then press 5 N, 1500 FV, CPT PV, which yields $1,020.87. Then press + RCL 1 = to see the answer. On the HP12C, press 2 n, 8 i, 0 PMT, 2500 FV, PV. Then press STO 1. Then press 5 n, 1500 FV, PV. Then press RCL 1 + to see the answer. Note that the answer will be displayed as a negative number.