3. Arya wants to take a trip to Japan in 8 years. She knows she will need about $4,200. How much should

she deposit into an account, now, that pays 3.5% interest, compounded daily, to meet her goal? Round

to the nearest dollar.

a $1,026

b. $1,706

c. $3,174

d. $3,781

c. $3,174

Step-by-step explanation:

Using a financial calculator, enter the following inputs to find the Present value (PV);

Future value; FV = 4,200

Total duration; N = 2,920 (365 days in a year times 8 years; 8 * 365 = 2920)

Daily interest rate; I = 3.5% / 365 = 0.009589%

PMT = 0

then CPT PV = 3,174.338

Therefore, Arya should deposit $3,174