Question

In: Finance

you invest 85,000 today in money market. How much will it be worth at the beggining...

you invest 85,000 today in money market. How much will it be worth at the beggining of the 6th year? The appropriate discount rate is 8% compounded quarterly

Solutions

Expert Solution

We use the formula:  
A=P(1+r/4)^4n
where   
A=future value
P=present value  
r=rate of interest
n=time period.

A=85000*(1+0.08/4)^(4*5)

=85000*1.4859474

=126305.53(Approx)


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