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When you were​ born, your grandfather established a trust fund for you in the Cayman Islands. The account has been earning interest at the rate of 66​% per year. If this account will be worth ​$120 comma 000120,000 on your 2323th ​birthday, how much did your grandfather deposit on the day you were​ born?

Respuesta :

Answer:

$1.0391

Explanation:

The question is asking for the calculation of the present value of a future sum.

First, the Future Value = $120,000 = FV

The number of years to achieve the value is = 23 years = N

and the earning interest rate per year is 66%= r

Based on these information, the formula for calculating the future value is as follows:

FV / (1/ (1+ r)∧)n)

Using the formula, we have the following:

$120,000/ [1/(1+0.66)∧23]

$120,000 /(1/115474.48258)

$120,000/ (0.0000086599)

=$1.0391

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