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Find the present value of $10,000 if interest is paid at a rate of 4% per year, compounded semiannually, for 3 years. (Round your answer up to the nearest cent.)

Respuesta :

Answer:

Present value = $11,261.6242

Explanation:

Given:

Amount (P) = $10,000

Interest rate = 4% = 0.04 yearly = 0.04 / 2 = 0.02 semi annually

Number of year = 3 year = 3 x 2 = 6 Semi annually

Present value = ?

Computation of Present value:

[tex]Present value = p[1+r]^n\\= 10,000 [1+0.02]^6\\= 10,000 [1.02]^6\\= 10,000 \times 1.12616242\\= 11,261.6242[/tex]

Present value = $11,261.6242

Therefore, Present value is $11,261.6242

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