Narrative 11-1
Solve the following problems using either Tables 11-1 or 11-2 from your text. When necessary, create new table factors. (Round new table factors to five decimal places, round dollars to the nearest cent and percents to the nearest hundredth of a percent)
-Refer to Narrative in your text 11-1. Keishawn wants to have $6,000 in 20 years. Calculate how much he should invest now at 8% interest, compounded annually in order to reach his goal.
A) $1,287.30
B) $1,872.15
C) $1,122.45
D) $2,550.00

Question

Quizplus · Accepted Answer

To find out how much Keishawn should invest now to have $6,000 in 20 years at 8% interest compounded annually, we use the present value formula: $PV = \frac{FV}{(1 + r)^n}$, where FV = $6,000, r = 0.08 (8%), and n = 20 years. Calculating gives us the present value (PV) which is closest to $1,287.30.

Narrative 11-1 Solve the Following Problems Using Either Tables 11-1 or 11-2