Question

if the interest rate is 3% and a total of $4,370.91 will be paid to you at the end of 3 years, what is the present value of that sum? a. 3,900.00 b. 3,947.00 c. 3,977.40 d. 4,000.00

Answer 1

The formula is
A=p (1+r)^t
A future value 4370.91
P present value?
R interest rate 0.03
T 3years
We need to solve for p
P=A÷(1+r)^t
P=4,370.91÷(1+0.03)^(3)
P=4,000.00