Question

Find the present value.

Amount Needed: $12,300
Time (Years): 4
Rate: 4%
Compounded: quarterly


$10,514.04

$11,820.05

$10,332.00

$10,489.69

Answer 1

ihave no cluser abt this 

Answer 2

Answer : $10,489.69

To find present value we use compound interest fromula

`FV=PV(1+ (r)/(n) )^(nt)`

where FV is the future value = 12300

PV is the present value

r is the rate of interest = 4% =
`(4)/(100) = 0.04`

n is the number of times the interest is compounded per year .

For compounded quarterly we use n=4

t is the time ( years ) = 4

we replace all the values in our formula and solve for PV:

`FV=PV(1+ (r)/(n) )^(nt)`

`12300=PV(1+ (0.04)/(4) )^((4)(4))`

`12300=PV(1.01 )^(16)`

`PV=(12300)/((1.01 )^(16))`

PV=10489.70

Therefore , $10489.70 is the present value needed to have $12,300 after 4 years.