How much money do I need to place into a bank account that pays a 1.08% rate in order to have $500 at the end of 7 years?
A) $332.54
B) $751.81
C) $463.78
D) $629.51

Question

Quizplus · Accepted Answer

To find out how much money you need to place into a bank account to have $500 at the end of 7 years with an interest rate of 1.08%, you can use the formula for calculating the present value of a future amount: $PV = \frac{FV}{(1 + r)^n}$, where PV is the present value (the amount of money you need now), FV is the future value ($500), r is the annual interest rate (1.08% or 0.0108), and n is the number of years (7). Plugging in the values: $PV = \frac{500}{(1 + 0.0108)^7}$, which calculates to approximately $463.78.

How Much Money Do I Need to Place into a Bank