How much would Kristen have to deposit in the bank today if she will be earning a 6% annual rate of return and wants to have $5,000 in the bank at the end of five years? (Round to the nearest dollar).
A) $5,637
B) $4,737
C) $4,212
D) $3,736

Question

Quizplus · Accepted Answer

To find the present value of $5,000 to be received in 5 years at a 6% annual interest rate, use the formula: PV = FV / (1 + r)^n. Here, FV = $5,000, r = 0.06, and n = 5. PV = 5000 / (1.06)^5 = $3,736 (rounded to the nearest dollar).

How Much Would Kristen Have to Deposit in the Bank