Lonnie is considering doing some long term investing with money that she inherited. She would like to have $50,000 at the end of 30 years. Approximately how much money would Lonnie need to put into an account earning 6% interest compounded annually in order to meet her goal?

Use the present value formula: divide the future goal by the growth factor, so Lonnie needs $50,000 ÷ (1.06)^30. Since (1.06)^30 is about 5.74, the required investment is about $50,000 ÷ 5.74 = $8,706. The correct choice is $8,706.

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