Sally would like to take an extra special trip in four years. She estimates she will need $10,000 for the trip. The best safe investment she can find currently pays 4% interest. How much must she invest today to have her $10,000 in four years? Round your answer to a while number.
A) $8,237
B) $8,548
C) $8,590
D) $11,841

Question

Quizplus · Accepted Answer

To find out how much Sally needs to invest today, we can use the formula: 
Present Value = Future Value / (1 + r)^n 
where r is the interest rate and n is the number of years.

In this case, Sally wants a future value of $10,000 in four years, with an interest rate of 4%. Plugging in the numbers, we get: 
Present Value = 10,000 / (1 + 0.04)^4 = $8,548

Therefore, Sally must invest $8,548 today to have $10,000 in four years. Round this to the nearest whole number, and the answer is B: $8,548.

Sally Would Like to Take an Extra Special Trip in Four