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. Ralph wants to save some money so that he can make a down payment of $3,000 on a car when he graduates from college 4 years from now.If he opens a savings account and earns 3% on his money,compounded annually,how much will he have to invest now?

A) $2,520
B) $2,664
C) $2,910
D) $3,000