Question

Find the principal needed now to get the given amount; that is, find the present value. To get $4000 after 2 1/4 years at 9% compounded daily The present value of $4000 is $? (Round to the nearest cent as needed.)​

Answer 1

Explanation:

Compounding formula

FV = PV ( 1 + i )^n FV = Future value (4000) PV = present value

i = decimal interest per PERIOD = .09/365

n = periods = 2 1/4 yrs * 365 days/yr = 821.25 periods

4000 = PV ( 1 + .09/365)^821.25

Solve for PV = $ 3266.83