# Answer to Question #55328 in Other Economics for Antornette Love

Question #55328

How much does one have to invest today for a lump-sum payback of 25,000 in five years if the annual interest rate is 12%, compounded monthly?

Expert's answer

For a lump-sum payback of 25,000 in five years if the annual interest rate is 12%, compounded monthly you have to invest today P = 25,000/(1+0.12/12)^60 = 13,761.24.

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