What amount must be deposited today at 8% p.a. to grow to $1200 in three years?

Question

Quizplus · Accepted Answer

Using the formula for future value of a present sum, we have:
FV = PV*(1+r)^n
where FV is the future value, PV is the present value to be deposited, r is the interest rate per period, and n is the number of periods. Plugging in the given values, we get:
1200 = PV*(1+0.08)^3
Solving for PV, we get:
PV = 1200 / (1.08)^3 = $952.56
Therefore, the correct choice is C.

What Amount Must Be Deposited Today at 8% P