You plan to invest an amount of money in five-year certificate of deposit (CD) at your bank.The stated interest rate applied to the CD is 12 percent, compounded monthly.How much must you invest if you want the balance in the CD account to be $8,500 in five years?
A)$4,678.82
B)$4,823.13
C)$13,600.00
D)$14,979.90
E)$7,589.29

Question

Quizplus · Accepted Answer

The correct answer is A because the present value of $8,500 in five years at 12% compounded monthly is $4,678.82.

You Plan to Invest an Amount of Money in Five-Year