Question

Find the present value of $2,600 under each of the following rates and periods: (Use 365 days for calculation. If you solve this problem with algebra round intermediate calculations to 4 decimal places, in all cases round your final answer to the nearest penny.)

a. 8.9 percent compounded monthly for five years.

Present value

$

b. 6.6 percent compounded quarterly for eight years.

Present value

$

c. 4.3 percent compounded daily for four years.

Present value

$

d. 5.7 percent compounded continuously for three years.

Present value

$

Answer 1

Present value of $2,600

(a): 8.9% compounded monthly for 5 years: Present value= $1,668.88

(b): 6.6% compounded quarterly for 8 years: Present value= $1,540.06

(c ): 4.3% compounded daily for 4 years: Present value= $2,189.17

(d): 5.7% compounded continuously for 3 years: Present value= $2,191.34

Calculations as below: