Heather Deposits $8 000 in an Investment Account That Offers

Multiple Choice

Heather deposits $8 000 in an investment account that offers 5% interest per year. The interest is due in 5 years. Annual inflation is expected to be 4% over the next 5 years. Heather's actual MARR per six-month period is 5%, compounded semiannually. What is the present worth of the interest?

A) $1 357
B) $1 471
C) $1 492
D) $1 504
E) $1 541