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What single sum amount must they deposit today

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Question - A prospective real-estate buyer wants to purchase a beach house when they retire. The buyer is aiming to have $1,500,000 to be available 8 years from today.

a. If the buyer thinks they can earn 6% interest annually, what single sum amount must they deposit today in order to achieve their goal of $1,500,000?

b. If the buyer thinks they can earn 6% interest annually in the first four years, but then thinks they will earn more than 6% interest annually in the last four years, would they need to deposit MORE or LESS money today (relative to (a)) in order to achieve their goal?

Reference no: EM133173431

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