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You are planning a special wedding three years from today. You don’t know who your spouse will be but you do know that you are saving $25,000 today and $35,000 one year from today for this purpose. You also plan to pay the final $45,000 of costs on your wedding day. At a discount rate of 7 percent, what is the current cost of your special wedding?

Respuesta :

Answer:

current cost of your special wedding = $94,444

Explanation:

given data

saving = $25,000

saving = $35,000

pay final = $45,000

discount rate = 7 %

to find out

current cost of your special wedding

solution

we find here Current cost of your special wedding that is express as

current cost of your special wedding = saving + [tex]\frac{saving}{(1+rate)}[/tex] + [tex]\frac{pay final}{(1+rate)^3}[/tex]    ...............................1

put here value we get

current cost of your special wedding = 25,000 + [tex]\frac{35,000}{(1+0.07)}[/tex] + [tex]\frac{45000}{(1+0.07)^3}[/tex]

current cost of your special wedding = $94,444