Use the Present Value Table on page 358 of your text to compute the present value (principal) for an investment with a compound amount of $20,000, a 30-month term of investment, and a 14% nominal interest rate compounded semiannually. (Points : 2.5)

Answer 1

Don't have your text book, nor tables, but with a modern calculator this is a piece of cake.

30 months = 2.5 years
= 5 half-years

i = .14/2 = .07

PV = amount(1+i)^-n
= 20000(1.07)^-5 = $ 14259.72