How much would Kristen have to deposit in the bank today if she will be earning a 6% annual rate of return and wants to have $5,000 in the bank at the end of five years? (Round to the nearest dollar).
A)$3,736
B)$4,212
C)$4,737
D)$5,637

Question

Quizplus · Accepted Answer

To find the present value, we use the formula: PV = FV / (1 + r)^n. Here, FV = $5,000, r = 0.06, and n = 5. So, PV = 5000 / (1.06)^5 = $3,735.57, which rounds to $3,736.

How Much Would Kristen Have to Deposit in the Bank