Question

Charles would like to accumulate $340,000 for her retirement in 10 years. If she is promised a rate of 4.29% compounded quarterly by her local bank, how much should she invest today?

Answer 1

$221,990.70

Explanation:

here we need to apply the formula for future value ,,,,

Future Value = Present value (1+r/m)^mt

we insert the values we have in their respective positions. 4 29% = 0.0429 when we convert it by dividing by 100%

340, 000 = PV (1+0.0429/4)^4×10

340, 000/1.5322 = PV

PV = $221,990.70