What will be the present value, if $6,800 is discounted back 4 years at an interest...

What will be the present value, if $6,800 is discounted back 4 years at an interest rate of 4% compounded semi-annually?

Solutions

Expert Solution

PV = FV / (1 + r)^t

where, r = 0.04 / 2 = 0.02

t = 4 * 2 = 8

PV = $6,800 / (1 + 0.02)^8

PV = $5,803.73

jeff jeffy answered 2 years ago

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