You expect to have $ 8 000$8 000 in one year. A bank is offering loans at 3.5 %3.5% interest per year. How much can you borrow​ today?

To calculate how much you can borrow today, you need to understand the concept of the time value of money, which in this case is represented by the interest rate of 3.5%.

The formula to calculate the present value (PV) is:

PV = FV / (1 + r)^n

where:

• FV is the future value of the money (the amount you expect to have in one year, which is $8,000),
• r is the interest rate (3.5% or 0.035 when expressed as a decimal), and
• n is the number of periods (in this case, 1 year).

Substituting the given values into the formula, we get:

PV = $8,000 / (1 + 0.035)^1 PV =$8,000 / 1.035 PV = $7,729.47

So, you can borrow approximately $7,729.47 today.