Use this information to answer the following question.

-What amount must be deposited today to grow to $900 in three years,assuming an APR of 7 percent?
A)$662.00
B)$734.40
C)$342.98
D)$841.50

Question

Use this information to answer the following question.

-What amount must be deposited today to grow to $900 in three years,assuming an APR of 7 percent?
A)$662.00 
B)$734.40 
C)$342.98 
D)$841.50

Quizplus · Accepted Answer

We can use the formula for future value of a present sum: FV = PV(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.

Substituting the given values, we get:

$900 = PV(1+0.07)^3

Simplifying and solving for PV, we get:

PV = $734.40

Therefore, the amount that must be deposited today is $734.40. 
Hence, the correct answer is B.

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