Judy would like to accumulate $70,000 by the time her son starts college in ten years. What amount would she need to deposit now in a deposit account earning 6%, compounded yearly, to accumulate her savings goal?

Question

Quizplus · Accepted Answer

To find the present value needed to accumulate $70,000 in 10 years at 6% interest compounded yearly, use the formula: PV = FV / (1 + r)^n. Here, FV = $70,000, r = 0.06, and n = 10. Calculating gives PV = $70,000 / (1.06)^10 = $39,088.

Judy Would Like to Accumulate $70,000 by the Time Her