Multiple compounding (PV): Joan Alexander wants to go on a cruise in three years. She could earn 8.2 percent compounded monthly in an account if she were to deposit the money today. She needs to have $10,000 in three years. How much will she have to deposit today? (Round to the nearest dollar.)
A) $6,432
B) $7,826
C) $8,148
D) $7,763

Question

Quizplus · Accepted Answer

To find the present value with monthly compounding, use the formula: PV = FV / (1 + r/n)^(nt). Here, FV = $10,000, r = 0.082, n = 12, t = 3. Calculating gives PV ≈ $7,826.

Multiple Compounding (PV): Joan Alexander Wants to Go on a Cruise