Choose the one alternative that best completes the statement or answers the question.
-How much money needs to be invested now to get $2000 after 4 years at 8% compounded quarterly? Express your answer to the nearest dollar.
A) $2746
B) $1848
C) $1457
D) $584

Question

Quizplus · Accepted Answer

To find the present value, use the formula for compound interest: $ P = \frac{A}{(1 + \frac{r}{n})^{nt}} $, where $ A = 2000 $, $ r = 0.08 $, $ n = 4 $, and $ t = 4 $. Plugging in these values gives $ P = \frac{2000}{(1 + \frac{0.08}{4})^{4 \times 4}} \approx 1457 $.

Choose the One Alternative That Best Completes the Statement or Answers