How much must you invest today at 8% interest in order to see your investment grow to $15,000 in 10 years?
A) $6,330
B) $6,945
C) $7,620
D) $7,500

Question

Quizplus · Accepted Answer

To find out how much you need to invest today to reach a future sum, you can use the formula for the present value of a single sum, which is PV = FV / (1 + r)^n, where PV is the present value (what you're solving for), FV is the future value ($15,000), r is the annual interest rate (8% or 0.08), and n is the number of periods (10 years). Plugging in the numbers: PV = $15,000 / (1 + 0.08)^10 = $15,000 / (1.08)^10 ≈ $6,944.58, which rounds to $6,945, making option B the correct choice.

How Much Must You Invest Today at 8% Interest in Order