Posted by **Amanda** on Sunday, November 25, 2012 at 1:01am.

Find the present value of $31,000 due in 4 yr at the given rate of interest.

(a) 6%/year, compounded quarterly

$ ?

(b) 3%/year, compounded quarterly

$ ?

- math -
**Henry**, Monday, November 26, 2012 at 8:39pm
a. P = Po(1+r)^n.

P = $31,000. = Value in 4 yrs.

Po = Initial value.

r = (6%/4) / 100% = 0.015 = Quarterly %

rate expressed as a decimal.

n = 4Comp./yr * 4yrs = 16 Compounding

periods.

P = Po(1.015)^16 = $31,000.

Po*1.26899 = 31000

Po = $24,428.96 = Present value.

b. Same procedure as "a".

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