Determine the present value of quarterly payments of $450 for 6 years at 7.5% annual interest, compounded quarterly. PV= R[(1+i)

Question

2 years ago

13

^-n]/i

1 answer:

alexira [117] · Answer 1 · 2023-06-07T04:02:37+03:00

Using it's formula, the present value of the amount is: $288.

<h3>What is the present value formula?</h3>

The present value formula is:

$PV = \frac{R}{(1 + r)^n}$

In which the parameters are:

Considering quarterly compounding, the parameters for this problem are as follows:

R = 450, r = 0.075/4 = 0.01875, n = 6 x 4 = 24.

Hence the present value is:

$PV = \frac{R}{(1 + r)^n}$

$PV = \frac{450}{(1.01875)^{24}}$

PV = $288

More can be learned about the present value formula at brainly.com/question/20813161

#SPJ1