Question

Nadia wants to know how much to invest today (rounded to the nearest dollar) in an account earning 6.4% interest compounded quarterly to have $80,000 at the end of 8 years. which value below is correct? select one: a. $48,138 b. some other value.

a. $48,703
b. $10,989
c. $70,460

Answer 1

To find out how much Nadia needs to invest today, we can use the formula for compound interest. Using the formula, the correct value for Nadia's investment, rounded to the nearest dollar, is $48,703 (Option B).

Step-by-step explanation:

To find out how much Nadia needs to invest today, we can use the formula for compound interest:

A = P * (1 + r/n)^(nt)

where:

• A = the future value of the investment ($80,000 in this case)
• P = the principal amount (what Nadia needs to invest)
• r = the annual interest rate (6.4% in this case)
• n = the number of times that interest is compounded per year (quarterly in this case)
• t = the number of years (8 years in this case)

Using the formula, the correct value for Nadia's investment, rounded to the nearest dollar, is $48,703 (Option B).