How much would you need to deposit today in order to be able to withdraw $500 in 2 years and $700 in 4 years, if the account has nothing in it today and interest is 6% per year, compounded annually?
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A. B. C. D. E.A
Work this question as two compound interest problems. On the BAII Plus, press 2 N, 6 I/Y, 0 PMT, 500 FV, CPT PV, which yields $445.00. Then press STO 1.
Then press 4 N, 700 FV, CPT PV, which yields $554.46. Then press + RCL 1 = to see the answer. On the HP12C, press 2 n, 6 i, 0 PMT, 500 FV, PV. Then press
STO 1. Then press 4 n, 700 FV, PV. Then press RCL 1 + to see the answer. Note that the answer will be displayed as a negative number.