Determine the present value P that must be invested to have the future value A at simple interest rate r after time t. A = $9000.00, r = 15.0%, t = 6 months (Do not round until the final answer. Then round up to the nearest cent as needed.)
Determine the present value P that must be invested to have the future value A at simple interest rate r after time t. A = $9000.00, r = 15.0%, t = 6 months (Do not round until the final answer. Then round up to the nearest cent as needed.)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Determine the present value P that must be invested to have the future value A at simple interest rate r after time t.
A = $9000.00, r = 15.0%, t = 6 months
(Do not round until the final answer. Then round up to the nearest cent as needed.)
Expert Solution
Step 1 - Introduction
To calculate the present value we will use the below formula
A = P+(P*r*t)
Where
A - Future value i.e. $9000.00
r - Interest rate i.e. 15.0%
t - Period i.e. 6 months = 0.50 Years
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