Find the present value of $50,000 due in 3 year(s) at the given rate of interest. 5% / year compounded monthly __________
9% / year compounded daily __________
A) $43,049, $38,170
B) $43,049, $58,074
C) $38,170, $58,074
D) $43,049, $65,496

Question

Quizplus · Accepted Answer

The present value is calculated using the formula for compound interest: $ PV = \frac{FV}{(1 + \frac{r}{n})^{nt}} $. For 5% compounded monthly: $ PV = \frac{50000}{(1 + \frac{0.05}{12})^{12 \times 3}} \approx 43,049 $. For 9% compounded daily: $ PV = \frac{50000}{(1 + \frac{0.09}{365})^{365 \times 3}} \approx 38,170 $.

Find the Present Value of $50,000 Due in 3 Year(s)