Edward has decided to purchase a high- performance motorcycle. He'll need 9,500 in 3 years. His bank offers an interest rate of 8% compounded quarterly. How much does Edward need to deposit now to have enough money for his motorcycle in 3 years?
The formula is A=p (1+r/k)^kt A future value 9500 P present value? R interest rate 0.08 K compounded quarterly 4 T time 3 years We need to solve the formula for p P=A÷(1+r/k)^kt P=9,500÷(1+0.08÷4)^(4×3) P=7,490.7 round your answer to get P=7491
