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Find the present value of $3,000 due in 5 years if money is worth 6% compounded quarterly.

A. $2,227.41
B. $2,536.27
C. $1,947.19
D. $2,117.62

User Mrbungle
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1 Answer

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Final answer:

To calculate the present value of $3,000 due in 5 years with a 6% interest rate compounded quarterly, we can use the present value formula. The present value is $2,227.41.

Step-by-step explanation:

To calculate the present value of $3,000 due in 5 years with a 6% interest rate compounded quarterly, we can use the present value formula. The formula is:

Present Value = Future Value / (1 + Interest Rate/Number of Periods)^(Number of Periods * Time)

Plugging in the values, we get:

Present Value = $3,000 / (1 + 0.06/4)^(4 * 5) = $2,227.41

Therefore, the present value of $3,000 due in 5 years is $2,227.41, which is option A.

User Biggates
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