At an interest rate of 7%, what must be the present value of $10,000 due in...

At an interest rate of 7%, what must be the present value of $10,000 due in 8 months?

Expert Solution

We use the formula:
A=P(1+r/100)^n
where
A=future value
P=present value
r=rate of interest
n=time period.[8 months=8/12 years]

10,000=P*(1+0.07)^(8/12)

P=10,000/(1+0.07)^(8/12)

=10,000*0.955896375

=$9558.96(Approx)

jeff jeffy answered 2 years ago

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