Posted by **Jackie** on Sunday, June 23, 2013 at 9:23am.

If the interest rate is 3% and a total of $4,370.91 will be paid to you at the end of 3 year, what is the present value of that sum.

- business math -
**MathMate**, Sunday, June 23, 2013 at 10:15am
We do not know if it is simple or compound interest. Since compounding frequency is not mentioned, we assume it is simple interest.

The simple interest formula:

Future value = present value(1+ni)

n=number of years,

i=annual interest

So

4,370.91 =PV(1+3*0.03)

=>

PV=4,370.91/(1.09)

=$4010

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