Respuesta :
M. Fields invest today $747,804 approximately.
We use the formula
A= P(1+r/100)^4n
where,
A = future value
P= present value
r = rate of interest
n = time period
1,200,000 = P(1 + 0.12/4)^(4×4)
P = 1,200,000/(1 + 0.12/4)^(4×4)
= $1,200,000 × 0.623166939
= $747,804(Approx)
Define compound interest.
The interest you earn on interest is known as compound interest. It accelerates the growth of your wealth. Thus you will receive returns on both the money you invest and returns at the conclusion of each compounding period, which causes a sum of money to increase more quickly than with simple interest.
Utilizing compound interest alternatives has certain disadvantages, one of which is that it may occasionally cost more than you anticipate. Making interest payments can really cost you money because compound interest's expense is not always immediately obvious if your investments are not well managed.
To learn more about compound interest, visit:
https://brainly.com/question/14295570
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The correct question is:
"M. Fields, Inc. wishes to accumulate $1,200,000 to be used to pay off a balloon note at the end of 4 years. How much will M. Fields invest today to accumulate the desired amount if the investment earns an annual rate of 12% compounded quarterly?
A. $704,000
B. $747,804
C. $508,416
D. $130,496 "
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