To receive 10000 after 3 years at 10 compounded monthly Find

To receive $10,000 after 3 years at 10% compounded monthly. Find the present value. Round to the nearest cent. O $8,363.87 $4,745.68 O $4,893.62 O $7,417.40

Solution

We use the formula:
A=P(1+r/1200)^12n
where
A=future value
P=present value
r=rate of interest
n=time period.

10000=P(1+10/1200)^(12*3)

P=10000/(1+10/1200)^(12*3)

=$10000*0.741739703

which is equal to

=$7417.40(Approx).