You want to have $40,000 for a down payment on a house 4 years from now.If you can earn 5.6 percent,compounded annually on your savings,how much do you need to deposit today to reach your goal?
A)$32,166.54
B)$34,420.73
C)$27,880.69
D)$28,211.17
E)$30,886.40

Question

Quizplus · Accepted Answer

To find the present value, use the formula: PV = FV / (1 + r)^n. Here, FV = $40,000, r = 0.056, and n = 4. Calculating gives PV = $40,000 / (1.056)^4 = $32,166.54.

You Want to Have $40,000 for a Down Payment on a House