A company needs to have $150,000 in 5 years, and will create a fund to insure that the $150,000 will be available. If it can earn a 6% return compounded annually, how much must the company invest in the fund today to equal the $150,000 at the end of 5 years? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)
A) $141,000
B) $112,095
C) $100,000
D) $45,000
E) $105,000
B) $112,095
Explanation: The PV factor on the Present Value of 1 table when n = 5 and i = 6% is 0.7473
Present Value = Future Value * PV Factor
Present Value = $150,000 * 0.7473 = $112,095
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