Question

53,730 receivable at the end of each period for 8 periods compounded at 12%

Present value = ?

Answer 1

P=21,700

Step-by-step explanation:

The principal amount can be obtained using the formula below

A = P(1 +r)^n

where

A = Amount 53,730

P= principal amount..?

r= interest rate = 12%

N = number of periods, eight period

53,730 = P( 1+ 12/100)^8

53,730 = P(1.12)^8

53,730 =p2.4759631

P=53,730 /2.476

P=21,700