SOLUTION: The present value of a sum of money is the amount that must be invested now, at a given rate of interest, to produce the desired sum at a later date. Find the present value of $

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Question 1198072: The present value of a sum of money is the amount that must be invested now, at a given rate of interest, to produce the desired sum at a later date.
Find the present value of $10,000 if interest is paid at a rate of 10% per year, compounded semiannually, for 2 years. (Round your answer up to the next cent.)

Answer by ikleyn(53937) (Show Source):
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The present value of a sum of money is the amount that must be invested now,
at a given rate of interest, to produce the desired sum at a later date.
Find the present value of $10,000 if interest is paid at a rate of 10% per year,
compounded semiannually, for 2 years. (Round your answer up to the next cent.)
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desired value = . = 1.05 is the effective growth rate per half of a year. The 2*2 in the power is 2 halves of a year taken twice, for two years. Thus, the equation is 10000 = or 10000 = , which gives present value = = 8227.024748 = 8227.03 dollars, rounded up to the nearest cent.

Solved.