Mark Larken promised his grandson Ralph that he would give him $3,000 six years from today for graduating from high school. If money is worth 10% compounded semiannually, what is the present value of this money?

Name: Mark Larken promised his grandson Ralph that he would give him $3,000 six years from today for graduating from high school. If money is worth 10% compounded semiannually, what is the present value of this money?
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Question

Quizplus · Accepted Answer

10% / 2 = 5%, 6 × 2 = 12 periods, $3,000 × .5568 = $1,670.40.

Mark Larken Promised His Grandson Ralph That He Would Give