Question
In: Finance
A bank offers a CD that pays a simple interest rate of 9.5 %. How much...
A bank offers a CD that pays a simple interest rate of 9.5 %. How much must you put in this CD now in order to have $2500 for a home-entertainment center in 3 years.
The present value that must be invested to get $2500 after 3 year to get an interest rate of 9.5% is?
Solutions
Expert Solution
Present value = Future value / (1 + r * t)
= $2500 / (1 + 9.5% * 3)
= $2500 / 1.285
= $1,945.5253 or $1,945.53
Present value = $1,945.53
jeff jeffy answered 2 years agoRelated Solutions
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