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 lump sum: FV = PV*(1+r)^n, where FV is the future value, PV is the present value (amount to be deposited today), r is the annual interest rate expressed as a decimal, and n is the number of periods (in this case, 3 years). Plugging in the given values, we get:
$900 = PV*(1+0.07)^3
Solving for PV, we get:
PV = $734.40
Therefore, the best choice is answer B.

Use This Information to Answer the Following Question