Question

If the interest rate is 3% and a total of $4,370.91 will be paid to you at the end of 3 years, what is the present value of the sum

Answer 1

Answer:

vp=  $1,989.49

Explanation:

To calculate the present value we use the following formula;

$vp = \frac{vf}{1+i^{n} }$

$vp = \frac{4,370.91}{(1+0.3)^{3} } = 1,989.49$