You have an invoice for a major expenditure due in 5 years for $82,000 and the annual interest rate of 5%. How much do you need now to pay for this expenditure?
(1.05)^5*X = 82,000
(assuming annual compounding)
1.2763 X = $82,000
X = $64,249
(assuming annual compounding)
1.2763 X = $82,000
X = $64,249