Xavier deposits $6 daily into an interest-bearing account to save for renovations to his bathroom. The account earns 4.57% which compounds annually. What is the present value of the investment if Xavier renovates his bathroom in five years
Xavier's deposit's present amount can be computed using the formula of the annuity. Present worth = Uniform payment[(1+i)^n-1]/(i(1+i)^n where Uniform payment = $6 x 365 =$2190 i= 4.57% n= 5 Substitute all the given values, we will get Present worth =$9595.32 The present worth of Xavier's deposit for bathroom renovation would be $9595.32.
