Question

Calculate the present value of the compound interest loan. (Round your answers to the nearest cent.)...

Calculate the present value of the compound interest loan. (Round your answers to the nearest cent.)

$24,000 after 7 years at 3% if the interest is compounded in the following ways.

(a) annually
$

(b) quarterly
$

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Homework Answers

Answer #1

Present value formula:

Where,
PV = Present value
FV = Future value
i = rate of interest
n = number of years
a = number of compounding in a year

a) Annually: (a =1)

b) Quartery: (a = 4)

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