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ziro4ka [17]
3 years ago
12

Bill wants to give Maria a $630,000 gift in 3 years. If money is worth 6% compounded semiannually, what is Maria's gift worth to

day?
Business
1 answer:
olga_2 [115]3 years ago
5 0

Answer:

$527,615.08

Explanation:

The formula that describes the present value of an investment compounded semiannually is:

PV = \frac{FV}{(1+\frac{r}{2}^{(2*t)})}

For a future value of $630,000 obtained at a 6% annual rate for 3 years, the present value is:

PV = \frac{630,000}{(1+\frac{6}{2}^{(2*3)})}\\PV=\$527,615.08

Maria's gift is worth $527,615.08 today.

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