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How much money should be deposited today in an account that earns 4% compounded quarterly so that it will accumulate to $5,300 in 3 years?

A) $596.52
B) $5,972.17
C) $4,711.68
D) $4,703.48

Respuesta :

mathstudent55

Answer:

D) $4,703.48

Step-by-step explanation:

Compound interest formula for principal P invested at interest rate r with n compounding periods per year. A = future value.

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

A = 5300

r = 4% = 0.04

n = 4

t = 3

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

5300 = P(1 + 0.04/4)^(4 × 3)

P = 5300/[(1 + 0.04/4)^(4 × 3)]

P = 5300/1.01^12

P = 4703.48

Answer: D) $4,703.48

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