Franklin needs to have $1,000 in 8 years.If his investment earns 5 percent compounded annually,how much must he invest today? (Round your answer to two decimals.)
A) $676.84
B) $680.58
C) $1,477.46
D) $1,469.33

Question

Quizplus · Accepted Answer

We can use the formula for future value of a single sum: 
FV = PV x (1 + r)^n 
where FV is the future value, PV is the present value, r is the annual interest rate, and n is the number of years. 
Plugging in the given values, we get: 
$1,000 = PV x (1 + 0.05)^8 
Solving for PV, we get: 
PV = $676.84, rounded to two decimals. 
Therefore, choice A is the correct answer.

Franklin Needs to Have $1,000 in 8 Years