Asked by Jackie

If the interest rate is 3% and a total of $4,370.91 will be paid to you at the end of 3 year, what is the present value of that sum.
Answered by MathMate
We do not know if it is simple or compound interest. Since compounding frequency is not mentioned, we assume it is simple interest.
The simple interest formula:
Future value = present value(1+ni)
n=number of years,
i=annual interest
So
4,370.91 =PV(1+3*0.03)
=>
PV=4,370.91/(1.09)
=$4010
Answered by joyce
3977.40
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