Question

Find the present value of the given future amount. \( \$ 98,000 \) for 13 months at \( 8 \% \) simple interest What is the present value? (Round to the nearest dollar as needed.)

Answer 1

To find the present value of the given future amount, we can use the formula for simple interest.

Step-by-step explanation:

To find the present value of the given future amount, we can use the formula for simple interest:

Using simple interest, the present value (PV) can be computed as follows:

Present Value = Future Value / (1 + (interest rate * time))

To obtain the current value, first calculate the expression included in parenthesis. Then, divide the result by FV.

Using the given values, we have:

Present Value = $98,000 / (1 + (0.08 * (13/12)))

Calculating this, we find that the present value is approximately $91,773.