What's the present value of $7,500 discounted back 5 years ifthe appropriate interest rate is...

What's the present value of $7,500 discounted back 5 years if the appropriate interest rate is 4.5%, compounded semiannually?

Solutions

Expert Solution

RATE = 4.5% Compounded semi annually

FV = 7500 , n = 5 years

we have to find present value

PV = FV/(1+r/m)^mn

PV = 7500/(1+ 0.045)^(2*5)

PV = 7500/(1+ 0.045)^10

PV = 7500/1.552969422 = 4829.46

Answer : 4829.46

jeff jeffy answered 2 years ago

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