Answer : $10,489.69
To find present value we use compound interest fromula
where
FV is the future value
= 12300
PV is the present value
r is the rate of interest = 4% =
n is the number of times the interest is compounded per year
.
For compounded quarterly we use n=4
t is the time ( years
) = 4
we replace all the values in our formula and solve for PV:
PV=10489.70
Therefore , $10489.70
is the present value needed to have $12,300 after 4 years.