Solve the problem.
-How much money should you invest now to have $15,000 in 9 years if you invest the money at a Rate of 1.2%, compounded monthly?
A) $13,465.14
B) $14,211.87
C) $15,000.00
D) $14,865.67

Question

Quizplus · Accepted Answer

To find the present value (the amount you should invest now) to have $15,000 in 9 years at an annual interest rate of 1.2% compounded monthly, you can use the formula for the present value of a single future amount: $PV = \frac{FV}{(1 + r/n)^{nt}}$, where PV is the present value, FV is the future value ($15,000), r is the annual interest rate (1.2% or 0.012 as a decimal), n is the number of times the interest is compounded per year (12 for monthly), and t is the time in years (9). Plugging in the values: $PV = \frac{15,000}{(1 + 0.012/12)^{12*9}}$, calculating this gives approximately $13,465.14.

Solve the Problem. -How Much Money Should You Invest Now to Have $15,000