Use the data in table 3.1 to answer the following question(s):
Table 3.1
-Refer to Table 3.1 above. How much will you need to deposit today in an account paying 7% if you wish to have $1,000 in 5 years?
A) $1,403
B) $713
C) $5,751
D) $4,100

Question

Use the data in table 3.1 to answer the following question(s):
  Table 3.1
-Refer to Table 3.1 above. How much will you need to deposit today in an account paying 7% if you wish to have $1,000 in 5 years?
A) $1,403 
B) $713 
C) $5,751 
D) $4,100

Quizplus · Accepted Answer

To find out how much you need to deposit today to have $1,000 in 5 years at a 7% interest rate, you use the present value formula: PV = FV / (1 + r)^n, where PV is the present value (the amount you need to deposit today), FV is the future value ($1,000), r is the annual interest rate (7% or 0.07), and n is the number of years (5). Plugging in the numbers: PV = $1,000 / (1 + 0.07)^5 ≈ $712.99, which rounds to $713.

Use the Data in Table 3