Question

Present and future value tables of $1 at 3% are presented below:

N	FV $1	PV $1
1	1.03000	0.97087
2	1.06090	0.94260
3	1.09273	0.91514
4	1.12551	0.88849
5	1.15927	0.86261
6	1.19405	0.83748
7	1.22987	0.81309
8	1.26677	0.78941
9	1.30477	0.76642
10	1.34392	0.74409
11	1.38423	0.72242
12	1.42576	0.70138
13	1.46853	0.68095
14	1.51259	0.66112
15	1.55797	0.64186
16	1.60471	0.62317

Joseph wants to invest in a 6% CD account that compounds semiannually. He would like this account to have a balance of $100,000 four years from now. How much must Joseph deposit to accomplish his goal?

		$88,849
		$78,941
		$25,336
		$22,510

Answer 1

Option B

78,941

Amount to be deposited

= 100,000 * PV $1 @3%, n= 8

= 100,000 * 0.78941

= 78,941