Carol wants to invest money in a 6% CD account that compounds semiannually. Carol would like the account to have a balance of $50,000 five years from now. How much must Carol deposit to accomplish her goal?
A)$35,069.
B)$43,131.
C)$37,205.
D)$35,000.PV = $50,000 x .744409* = $37,205 *PV of $1: n=10; i=3%

Question

Quizplus · Accepted Answer

Using the formula for compound interest, we can set up the equation: 
$50,000 = P(1 + 0.03)^{10}
where P is the initial deposit. 
Solving for P, we get P = $37,205. Therefore, the best choice is C.

Carol Wants to Invest Money in a 6% CD Account