find the present value of the following future amount.

600,000 at 6% compunded semiannually for 25 years what is the present value

1 answer

P = Po(1+r)^n

r = (6%/2)/100% = 0.03 = Semi-annual %
rate expressed as a decimal.

n = 2Comp,/yr. * 25yrs. = 50 Compounding periods.

Po(1.03)^50 = $600,000
Po*4.38391 = 600000
Po = $136,864.25 = Present value.

Plug the above values into the given Eq. and get $