Solve the problem.
-How much money should you invest now in order to have $80,000 in 21 years? Assume that the Money earns interest at 2.6%, compounded annually?
A) $40,000.00
B) $27,220.80
C) $46,665.44
D) $9262.15

Question

Quizplus · Accepted Answer

To find out how much money you should invest now to have $80,000 in 21 years at an annual interest rate of 2.6%, compounded annually, you can use the formula for the present value of a single future amount: $PV = \frac{FV}{(1 + r)^n}$, where PV is the present value (the amount you need to invest now), FV is the future value ($80,000), r is the annual interest rate (2.6% or 0.026 as a decimal), and n is the number of periods (21 years). Plugging in the values, we get: $PV = \frac{80,000}{(1 + 0.026)^{21}}$, which calculates to approximately $46,665.44.

Solve the Problem. -How Much Money Should You Invest Now in Order to in Order