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Monica wants to sell her share of an investment to Barney for $150,000 in 6 years. If money is worth 6% compounded semiannually, what would Monica accept today?
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Monica wants to sell her share of an investment to Barney for $150,000 in 6 years. If money is worth 6% compounded semiannually, what would Monica accept today?

User Drea
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1 Answer

4 votes

Answer:

PV= $105,206.99

Step-by-step explanation:

Giving the following information:

Future Value (FV)= $150,000

Number of periods= 6*2= 12 semesters

Interest rate= 0.06/2= 0.03

To calculate the present value (PV), we need to use the following formula:

PV= FV/(1+i)^n

PV= 150,000 / (1.03^12)

PV= $105,206.99

User Jakeisonline
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