Samantha opened a savings account this morning. Her money will earn 5 percent in

Question

Samantha opened a savings account this morning. Her money will earn 5 percent interest, compounded annually.After five years, her savings account will be worth $5,600. Assume she will not make any withdrawals.
Given this, which one of the following statements is true?

a. Samantha deposited more than $5,600 this morning.

b.Samantha could have deposited less money and still had $5,600 in five years if she could have earned 5.5 percent interest.

c.The present value of Samantha's account is $5,600.

d.Samantha would have had to deposit more money to have $5,600 in five years if she could have earned 6 percent interest.

e.Samantha will earn an equal amount of interest every year for the next five years.
check my work

Explanation / Answer

b.Samantha could have deposited less money and still had $5,600 in five years if she could have earned 5.5 percent interest. since pv(1.05^5= 5600 PV= $4387.746 if interest is 5.5% amount to be deposited today = 5600/1.055^5= $4284.75

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