Answer:
The value needed now is $102,296.60
Step-by-step explanation:
Here, we want to calculate the present value needed.
We shall be using the formula for compound interest here
Mathematically;
A = I(1 + r/n)^nt
According to the question;
I is the initial amount which is what we want to calculate
A is the accumulated amount with interest = 140,000
r is the interest rate = 8% = 8/100 = 0.08
n is the number of times interest is compounded which is 4, since it is quarterly
t is the number of years = 2
Substituting these values, we have ;
140,000 = I(1 + 0.08/2)^(4 * 2)
140,000 = I(1.04)^8
I = 140,000/(1.04)^8
I = 102,296.62870027774
Which is I = $102,296.60 to the nearest cent
