Answer:
PV= $3,978.115
Explanation:
Giving the following information:
Interest rate (i)= 8% = 0.08
Future value (FV)= $20,000
Number of periods (n)= 21 years
To calculate the lump-sum to be invested today, we need to use the following formula:
PV= FV / (1 + i)^n
PV= 20,000 / (1.08^21)
PV= $3,978.115
