Question

Find the present value that will grow $1000 if the annual interest rate is 7.5% compounded quarterly for 5 years

Answer 1

911.3010934

Explanation:

Formula:

A = P(1 + r/4)^n

In this case:

A = 100

P = ?

R = .075 (7.5%)

N = 5

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1000 = P(1+.075/4)^5

1000 = P(1.01875)^5

1000 = P(1.097332163)

1000/1.097332163 = P

P = 911.301