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Calculate the present value. (Round your answer to two decimal places.)

A = $35,000, r = 6% compounded monthly, t = 6 years

User Lara
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1 Answer

3 votes

Answer:

Explanation:

To calculate the present value of the given investment, we can use the formula for present value of a future sum:

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

where PV is the present value, FV is the future value (the amount of the investment), r is the annual interest rate (6% in this case), n is the number of times the interest is compounded per year (12 for monthly compounding), and t is the time period in years (6 years in this case).

Substituting the given values into the formula, we get:

PV = 35,000 / (1 + 0.06/12)^(12 x 6)

PV = 35,000 / (1.005)^72

PV = 23,009.97

Therefore, the present value of the investment is $23,009.97.

User Yumiko
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