Question

Obtain the Present Value of deposits of $ 7,200 semiannual made over 5 and a half years, at an interest rate of 28% per year, continuously capitalizable.

Answer 1

Present Value = Sum of Amount / e^(semiannual interest rate * period)

Semi-annual amount = 7200

Number of payments = 5.5 * 2 = 11

Semi-annual interest rate = 14

Present value = 7200/e^(0.14*1) +7200/e^(0.14*2) +7200/e^(0.14*3) +7200/e^(0.14*4) +7200/e^(0.14*5) +7200/e^(0.14*6) +7200/e^(0.14*7) +7200/e^(0.14*8) +7200/e^(0.14*9) +7200/e^(0.14*10) +7200/e^(0.14*11)

Present Value = 37641.00 Answer

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