Question

Calculate the present value PV of an investment that will be worth $1,000 at the stated interest rate after the stated amount of time. HINT [See Quick Example 4.] (Round your answer to the nearest cent.) 15 years, at 3% per year, compounded annually

Answer 1

Answer:

$641.86

Explanation:

Future value = $1,000

Years = 15

Rate = 3%

The present value = FV*1/(1+i)^n

The present value = 1,000*1/(1+0.03)^15

The present value = 1,000*1/(1.03)^15

The present value = 1,000*1/1.5579674166

The present value = 1,000*0.6418619473970326

The present value = 641.8619473970326

The present value = $641.86

Answer 2

The present value of the investment is $641.86.

The present value of an investment is the value of the investment today. The present value can be determined by discounting the future value using the stated interest rate.

Present value = $\frac{FV}{(1 + r)^{t} }$

• FV = future value = $1000
• r = interest rate = 3%
• t = time = 15

$\frac{1000}{(1.03)^{15} }$ = $641.86

A similar question was solved here: brainly.com/question/9641711?referrer=searchResults