In: Finance
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
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)