Maria has just received an inheritance of $89,218 and she is going to invest the money today at 10.5% compounded monthly. This money must provide her with $75,000 in eight years and $100,000 in twelve years. If the $89,218 isn't enough, she will add to the investment now from her other savings. If the $89,218 is more than enough she will spend the extra money. Which of the following statements is true?
A) She must add $11,674 to the $89,218.
B) She must add $85,782 to the $89,218.
C) She has exactly the right amount of money now.
D) She can spend $137,812 of the $89,218.
E) She can spend $28,200 of the $89,218.

Question

Quizplus · Accepted Answer

The future value of $89,218 invested at 10.5% compounded monthly for 12 years is more than $100,000. The excess amount is $28,200, which she can spend.

Maria Has Just Received an Inheritance of $89,218 and She