Mrs.Bertucci wants to give her new granddaughter $40,000 on her 21st birthday.If she can invest the money at 4%, the amount she needs to set aside when her granddaughter is born is closest to:

Question

Quizplus · Accepted Answer

To find the present value of $40,000 needed in 21 years at a 4% interest rate, use the formula for present value: PV = FV / (1 + r)^n. Plugging in the values: PV = $40,000 / (1 + 0.04)^21 ≈ $17,553.

MrsBertucci Wants to Give Her New Granddaughter $40,000 on Her