Bella requires €120,000 in four years to purchase a new home. What amount must be invested today in an investment that earns 6% interest, compounded annually?
A) €95,051
B) €98,724
C) €145,336
D) €151,497

Question

Quizplus · Accepted Answer

To find the present value, use the formula: PV = FV / (1 + r)^n, where FV = €120,000, r = 0.06, and n = 4. PV = €120,000 / (1.06)^4 = €95,051.

Bella Requires €120,000 in Four Years to Purchase a New