Asked by Jill
What is the present value of $3,800 at 8.9 percent compounded monthly for five years.
Thurs far, I have P= ?/(1+i)n
(1 + 0.89/12)12*5
(1.0074167)60
Thurs far, I have P= ?/(1+i)n
(1 + 0.89/12)12*5
(1.0074167)60
Answers
Answered by
Henry
P = Po(1+r)^n
P = $3,800
r = (8.9%/12)/100% = 0.00742 = Monthly %
rate expressed as a decimal.
n = 12comp./yr. * 5yrs.=60 Compounding
periods.
P = Po(1+0.00742)^60 = 3800
Po*(1.00742)^60 = 3800
Po = 3800/(1.00742)^60 = $2438.65 =
Present value.
P = $3,800
r = (8.9%/12)/100% = 0.00742 = Monthly %
rate expressed as a decimal.
n = 12comp./yr. * 5yrs.=60 Compounding
periods.
P = Po(1+0.00742)^60 = 3800
Po*(1.00742)^60 = 3800
Po = 3800/(1.00742)^60 = $2438.65 =
Present value.
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