Question

Calculate the present value. (Round your answer to two decimal places.)A = $25,000, r = 7% compounded monthly, t = 3 years

Answer 1

Present value is:

`PV=(A)/((1+r)^n)`

Where:

`\begin{gathered} A=25000 \\ r=(7)/(100) \\ r=0.07 \\ t=3 \\ n=12*3 \\ n=36 \end{gathered}`

So present value is:

`\begin{gathered} PV=(25000)/((1+0.07)^(36)) \\ =(25000)/(11.4239) \\ =2188.386 \end{gathered}`