Answer:
Present value is;PV ≈ $27,561
Explanation:
We are given;
Future value;FV = $30,000
Rate quarterly;R = 2% × ¼ = 1/200 = 0.005
Time;T = 17 quarters
We can find the present value from the formula;
FV = PV(1 + R)^(T)
So, making PV the subject, we have;
PV = FV/[(1 + R)^(T)]
Where PV is present value and all other terms remain as i defined them earlier.
Plugging in the relevant values, we obtain ;
PV = 30000/[(1 + 0.005)^(17)]
PV ≈ $27,561