Final answer:
The present value of receiving $3500 at the end of two years, assuming an interest rate of 8% compounded semiannually, is approximately $2917.47.
Step-by-step explanation:
To calculate the present value of receiving $3500 at the end of two years, assuming an interest rate of 8% compounded semiannually, we can use the formula for the present value of a future cash flow:
Present Value = Future Value / (1 + Interest Rate)^n
In this case, the future value is $3500, the interest rate is 8% (or 0.08), and since the interest is compounded semiannually, the number of periods (n) is 4 (2 years * 2 semi-annual periods per year). Plugging in these values:
Present Value = $3500 / (1 + 0.08)^4 = $2917.47
Therefore, the present value of receiving $3500 at the end of two years is approximately $2917.47.