Framing Art Inc. will need to purchase two new cashier machines in 2 years, at a cost of $148 each. A savings account pays 2% per year compounded quarterly. How much should Framing Art Inc. deposit now in this account to have the cash available in 2 years to pay cash for both machines

Farming Art Inc. should deposit $284.42

Explanation:

Giving the following information:

Framing Art Inc. will need to purchase two new cashier machines in 2 years, for $148 each. A savings account pays 2% per year compounded quarterly.

Total cost=148*2 = $296

To calculate the monetary value to deposit today, we need to use the following formula:

PV = FV / (1+i) ^n

FV = 296

i = 0.02/4 = 0.005

n=2*4 = 8

PV = 296/1.005^8 = $284.42