Present and future value tables of $1 at 3% are presented below: PVAD $1 .00000

Question

Present and future value tables of $1 at 3% are presented below: PVAD $1 .00000 1.97087 2.91347 3.82861 4.71710 FVA $1 PVA $1 0.97087 1.91347 2.82861 3.71710 4.57971 5.41719 6.23028 7.01969 7.78611 8.53020 9.25262 9.95400 10.63496 11.29607 11.93794 12.56110 1.03000 1.06090 1.09273 1.12551 1.15927 0.97087 0.94260 0.91514 0.88849 1.0300 2.0909 1.0000 41836 5.3091 6.4684 4.3091 5.4684 6.6625 4 5 1.22987 1.26677 1.30477 1.34392 1.38423 1.42576 1.46853 1.51259 1.55797 1.60471 0.83748 0.81309 0.78941 0.76642 0.74409 0.72242 0.70138 0.68095 0.66112 0.64186 0.62317 8 9 7.23028 8.01969 8.78611 9.53020 10.25262 10.95400 11.63496 12.29607 12.93794 8.8923 10.1591 10.4639 11.8078 13.1920 2.8078 14.1920 13 7.0863 8.5989 20.1569 16.0863 17.5989 19.1569 20.7616 15 Carol wants to invest money in a 6% CD account that compounds semiannually. Carol would like the account to have a balance of $60,000 2-years from now. How much must Carol deposit to accomplish her goal? $51,259 O $71.714. O $53,309 O $55,715

Explanation / Answer

We use the formula:
A=P(1+r/200)^2n
where
A=future value
P=present value
r=rate of interest
n=time period.

60000=P(1+6/200)^(2*2)

P=60000/(1+6/200)^(2*2)

=60000/1.12551

=$53309(Approx).

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