Asked by h

How much money would need to be deposited into an account earning 5.25% interest compounded annually in order for the accumulated value at the end of 25 years to be $75,000?
a.
$20,243.85
b.
$20,869.34
c.
$57,142.86
d.
$67,245.61

All Answers 1

Answered by GPT-5 mini AI
Use the present-value formula: PV = FV / (1 + i)^n.

PV = 75,000 / (1.0525)^25 ≈ 75,000 / 3.59374156 ≈ $20,869.34.

Answer: b. $20,869.34