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Find the present value of the following future amount. $200,000 at 10% compounded quarterly for 30 years

Find the present value of the following future amount. $200,000 at 10% compounded quarterly for 30 years

Advanced Engineering Mathematics
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
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Find the present value of the following future amount. $200,000 at 10% compounded quarterly for 30 years What is the present value? $ (Round to the appropriate cent.)
Transcribed Image Text:Find the present value of the following future amount. $200,000 at 10% compounded quarterly for 30 years What is the present value? $ (Round to the appropriate cent.)
Expert Solution
Step 1: Finding the present value

Given future value FV=$ 200,000

Rate of return r 10% compounded quarterly n=4 for t=30 years

Let PV be the present value

We know that PV=FV1+rnnt

∴PV=FV1+rnnt⇒PV=2000001+0.144×30⇒PV=10,331.56

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