Question

Find the present value (the amount that should be invested now to accumulate the following amount) if the money is compounded as

indicated. $5600 at 2% compounded quarterly for 3 years

Answer 1

The present value of $5600 at 2% compounded quarterly for 3 years is approximately $5211.80.

Step-by-step explanation:

To find the present value of $5600 invested at 2% compounded quarterly for 3 years, we can use the formula for compound interest:

Present Value = Future Value / (1 + (interest rate / number of compounding periods)^(number of compounding periods * number of years)

Substituting the given values into the formula, we get:

Present Value = $5600 / (1 + (0.02 / 4))^(4 * 3)

Calculating this expression, the present value of $5600 at 2% compounded quarterly for 3 years is approximately $5211.80.