Find the principal needed now to get the given amount that i

Find the principal needed now to get the given amount; that is, find the present value. To get $500 after 3 years at 9% compounded monthly The present value of $500 is $ (Round to the nearest cent as needed.)

Solution

Amount=$500 , time= 3 years    Rate of interest=9%=.09

We will use the formula of compound interest which is

A=P(1+r/n )^(nt)

500=P(1+.09/12)^(12*3)

500=P(1+ .09/12)^36

P=500/(12.09/12)^36 = $382.07