SOLUTION: Calculate, to the nearest cent, the present value of an investment that will be worth $1,000 at the stated interest rate after the stated amount of time.
6 years, at 4.1% per yea
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-> SOLUTION: Calculate, to the nearest cent, the present value of an investment that will be worth $1,000 at the stated interest rate after the stated amount of time.
6 years, at 4.1% per yea
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Question 1179712: Calculate, to the nearest cent, the present value of an investment that will be worth $1,000 at the stated interest rate after the stated amount of time.
6 years, at 4.1% per year, compounded weekly (52 times per year)
PV = $ Answer by Theo(13342) (Show Source):
present value = 782.00 rounded to the nearest penny.
i confirmed using my own calculator that the answer is 781.9980202.
round that to the nearest penny to get 782.
both calculator agree.
the formula you can use for this is:
PRESENT VALUE OF A FUTURE AMOUNT
p = f/(1+r)^n
p is the present value.
f is the future amount.
r is the interest rate per time period.
n is the number of time periods.
f = 1000
(1+r) = (1 + 4.1/5200) = .0007884615385
n = 6 * 52 = 312
the formula becomes:
p = 1000 / 1.0007884615385^312 = 781.9980202
round to nearest penny to get 782.
everybody agrees, so the answer is probably correct.
here are the results from using the online calculator
the inputs are everything but pv.
that's the output.
what you see is the formatted version of the inputs and outputs.
the actual inputs were:
fv = 1000
np = 312
ir = .0788461538
note that the calculator uses percent, while the formula uses rate.
4.1/52 = .0788461538%
divide that by 100 to get the rate of .000788461538.
