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shutvik [7]
3 years ago
8

Compute the present value of a $100 investment made 6 months, 5 years, and 10 years from now at 4 percent interest. Instructions

: Enter your responses rounded to the nearest penny (two decimal places). Present value of investment made in 6 months at 4 percent
Business
1 answer:
sladkih [1.3K]3 years ago
6 0

Answer:

Present value investment = $98.05

Explanation:

given data

present value = $100

time 1 = 6 months = \frac{6}{12}  = 0.5 year

time 2 = 5 years

time 3 = 10 years

interest rate = 4 % = 0.04

to find out

Present value investment in 6 month for the rate  4 percent

solution

we get here Present value investment by as

Present value investment = present value ÷ (1+r)^{t} ..............1

put here value and we get

Present value investment = \frac{100}{(1+0.04)^{0.5}}    

solve it we get

Present value investment = \frac{100}{1.0198}

Present value investment = $98.05

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