The Solution to This Problem Requires Time Value of Money

Multiple Choice

The solution to this problem requires time value of money calculations. Reference to Tables 9-1 through 9-4 in the text is necessary to complete the calculations. A company will have to pay a $50,000 liability in 4 years. How much must be deposited now into a bank account earning 8% compounded semiannually to fully fund the future payment?

A) $35,500
B) $36,550
C) $36,523
D) $34,000