In order to be able to make $25,000 in five years at a rate of 8%, Jim needs to invest $17,014.58.
How much should Jim invest?
The $25,000 would be the future value of the amount invested today.
The relevant formula is therefore:
Future value = Amount x ( 1 + rate) ^ number of years
Solving gives:
25,000 = Amount x ( 1 + 8%)⁵
Amount = 25,000 / 1.4693280768
= $17,014.58
In conclusion, he should invest $17,014.58.
Find out more on future value at https://brainly.com/question/25805668.
