Answer:
Step-by-step explanation:
Present value formula;
(PV) = [tex]\frac{FV}{(1+r)^{n} }[/tex]
FV= Future amount (A) = $30,000
r = interest rate; monthly rate in this case = 7% / 12 = 0.5833% or 0.005833 as a decimal
n= total duration of investment (in months) in this case= 7*12 = 84 months
Next, plug in the numbers into the formula;
PV = [tex]\frac{30,000}{(1.005833)^{84} } \\ \\ =\frac{30,000}{1.62994868}[/tex]
=18,405.48747
Therefore present value rounded to 2 decimal places = $18,405.49
