You and your brother are planning a large anniversary party 3 years from today for your grandparents' 50^th wedding anniversary. You have estimated that you will need $2,500 for this party. You can earn 3.5 percent compounded annually on your savings. How much would you and your brother have to deposit today in one lump sum to pay for the entire party? A) $2,199.74 B) $2,254.86 C) $2,308.16 D) $2,334.90 E) $2,368.81

Question

Quizplus · Accepted Answer

To find the present value, use the formula: PV = FV / (1 + r)^n. Here, FV = $2,500, r = 0.035, and n = 3. PV = $2,500 / (1.035)^3 = $2,254.86.

You and Your Brother Are Planning a Large Anniversary Party