Answer:
Ans. a) Present Value $3,145.20 b) Present Value $2,902.42 c) Present Value $4,125.74 d) Present Value $4,129.83
Explanation:
Hi, questions a) through c) can be answered with the following equation:
[tex]PresentValue=\frac{FutureValue}{(1+\frac{r}{n} )^{nt} }[/tex]
Where:
r = discount rate (or the rate with what the problem starts)
n = Periods per year ( for a) 12, b) 4, c) 365)
t = years
So, let´s start answering.
a) should look like this.
[tex]PresentValue=\frac{4,900}{(1+\frac{0.089}{12} )^{12*5} }=3,145.20[/tex]
b) Should look like this
[tex]PresentValue=\frac{4,900}{(1+\frac{0.066}{4} )^{4*8} }=2,902.42[/tex]
c) Should look like this
[tex]PresentValue=\frac{4,900}{(1+\frac{0.043}{365} )^{365*4} }=4,125.74[/tex]
d) on the other hand follows this equation.
[tex]PresentValue=\frac{FutureValue}{e^{rt} }[/tex]
Again, "t" is years to present value.
d) would look like this.
[tex]PresentValue=\frac{4,900}{e^{0.057*3} }=4,129.83[/tex]
Best of luck
