Question

What's the present value of $11,500 discounted back 5 years if the appropriate interest rate is 5.7%, compounded semiannually? Your answer should be between 8032.00 and 9554.00, rounded to 2 decimal places, with no special characters.

Answer 1

Using the formula for the present value of a lump sum:

PV = FV / (1 + r/n)^(n*t)

where PV is the present value, FV is the future value, r is the annual interest rate, n is the number of times interest is compounded per year, and t is the number of years.

We need to find the present value of $11,500 discounted back 5 years, with an interest rate of 5.7% compounded semiannually, so:

PV = 11500 / (1 + 0.057/2)^(2*5)
PV = $8,547.81

Therefore, the present value of $11,500 discounted back 5 years with an appropriate interest rate of 5.7% compounded semiannually is $8,547.81.