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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 -

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

• business math -

3977.40

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