Aunt Tillie has deposited $33,000 today in an account which will earn 10 percent annually. She plans to leave the funds in this account for seven years earning interest

If the goal of this deposit is to cover a future obligation of $65,000, what recommendation would you make to Aunt Tillie?

FV = 33,000(1.1)7 = $64,308
Aunt Tillie will only have $64,308 at the end of seven years under the stated arrangement. She must find an account with a higher interest rate or deposit a larger sum today.
The amount Aunt Tillie should invest today to receive $65,000 after 7 years, PV = 65,000 / (1.1)7 = $33,355.28