Answer:
$16,199.
Explanation:
She will need to invest an amount that is equivalent to the present value of $25,000, at 7.5 % for six years. $25,000 represents the future value.
The applicable formula is
PV = FV
(1+r)n
Where
FV, future value is $25,000
r is interest rate 7.5% 0r 0.075
n is period six years
PV = $25,000
(1 + 0.075)6
pv = $25,000/ 1.54330
PV= $16,199.
