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Michele wants to have $2000 in spending money to take a trip to Disney World in...

Michele wants to have $2000 in spending money to take a trip to Disney World in three years. She needs to know how much see needs to deposit now in a savings account that pays 2% compound interest the have the money she needs. To answer her question, she should to refer to which of the following compound interest tables?

A. Present Value of $1

B. Present Value of an Annuity of $1

C. Future Value of an Annuity of $1

D. Future Value of $1

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Answer #1

Answer: Option A. Present Value of $1

The present value of $1 table will show how much principal needs to be invested today to have $2,000 at the end of 3 years at 2% rate of interest.

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