Present Value of a Single Amount You just found out that you had a very eccentric uncle who lived quietly in Manhattan. He left you $65,000. You just saw the movie The Bucket List and have decided that you want to put some money away so that in 15 years, you can start fulfilling items on that list. With whatever monies you have left, you'll pay off some bills. You have found an investment instrument that will pay 9% interest annually. What is the amount you should invest today to have $74,750 in 15 years? Note: Use the dropdown menu at the bottom of this page to view the present value factor data necessary to complete this problem. You can also use your financial calculator, but note that your answer may be slightly different than if you use the tables, due to rounding. Present Value of an Annuity Now the 15 years have passed, and you are ready to pull some money out of your fund. You talked to your investment advisor who says you can take this money and move it into a fund that will earn 9% interest annually. And you envision tackling most of your bucket list items over the next 20 years. What is the annual amount you will have to spend for your bucket list activities? Note: Use the dropdown menu at the bottom of this page to view the present value annuity factor data necessary to complete this problem. Table of Present Value Factors Interest Rate Year 3% 5% 7% 8% 9% 6 .837 .746 .596 .666 .582 .630 .540 8 .789 .677 .502 10 .744 .508 .463 .614 .557 .422 .356 .444 .397 12 15 .701 .642 ,481 .362 .315 .275 20 .554 .377 .258 .215 .178 Table of Present Value Annuity Factors x Year 3% 8% 9% 6 Interest Rate 5% 7% 5.076 4.767 6.463 5.971 7.722 7.024 4.486 5.417 7.020 8.530 8 4.623 5.747 6.710 5.535 6.418 10 12 7.943 7.536 7.161 9.954 11.938 15 8.863 10.380 12.462 9.108 8.560 8.061 20 14.878 10.594 9.818 9.129