What is the present value of $3,800 at 8.9 percent compounded monthly for five years.

Question

Thurs far, I have P= ?/(1+i)n

(1 + 0.89/12)12*5
(1.0074167)60

Answer 1

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.