James Just Received an $8,000 Inheritance Check from the Estate

question 7

Multiple Choice

James just received an $8,000 inheritance check from the estate of his deceased rich uncle. James wants to set aside enough money to pay for a trip in five years. If the trip is expected to cost $5,000, how much of the $8,000 must James deposit now if the rate of return is 12% per year in order to have the $5,000 in five years?

• A)$2,535
• B)$2,835
• C)$2,000
• D)$5,000

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