document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1102514>Question 1102514</A>: <I><SPAN STYLE=\"word-break: break-all;\"> Determine the present value of a 20-year GIC with an interest rate of 7.9% a compounded quarterly, if the future value is $11100\r<BR>\n" );
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document.write( "A) 150.21 B) 2426.02 C) 2321.81 D) 1387.55 </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #717226 by </B><A HREF=/tutors/aboutme.mpl?userid=Theo><B>Theo(13342)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=Theo><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/cgi-bin/show-face.mpl?user=Theo><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=717226\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> i get selection C.\r<BR>\n" );
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document.write( "the formula to use is f = p * (1 + r) ^ n\r<BR>\n" );
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document.write( "f is the future value<BR>\n" );
document.write( "p is the present value<BR>\n" );
document.write( "r is the interest rate per time period #####<BR>\n" );
document.write( "##### time period is in quarters therefore take the annual interest rate and divide it by 4 to get the quarterly interest rate (not the %).<BR>\n" );
document.write( "n is the number of time periods #####<BR>\n" );
document.write( "##### time period is in quarters therefore take the number of years and multiply them by 4 to get the number of quarters.\r<BR>\n" );
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document.write( "in your problem:\r<BR>\n" );
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document.write( "f = 11100<BR>\n" );
document.write( "p = what you want to find<BR>\n" );
document.write( "r = 7.9% / 100 = .079 / 4 = .01975<BR>\n" );
document.write( "n = 20 * 4 = 80\r<BR>\n" );
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document.write( "formula becomes 11100 = p * (1.01975) ^ 80<BR>\n" );
document.write( "solve for p to get p = 11100 / ((1.01975) ^  80)<BR>\n" );
document.write( "your result is p = 2321.805628\r<BR>\n" );
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document.write( "that's selection C.\r<BR>\n" );
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document.write( " </SPAN>\n" );
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