Find the present value of the given future amount, 13,048.54 at 5.4% compounded annually for 7 years 

To find the present value (PV) of a future amount, we use the formula for compound interest:

\[
PV = \frac{FV}{(1 + r)^n}
\]

Where:
- \( FV \) is the future value (13,048.54),
- \( r \) is the interest rate per period (5.4% or 0.054),
- \( n \) is the number of periods (7 years).

Now, let's calculate the present value:

\[
PV = \frac{13,048.54}{(1 + 0.054)^7}
\]

I'll calculate this next.The present value (PV) of the future amount \( 13,048.54 \) at 5.4% compounded annually for 7 years is approximately \( 9,029.79 \).

Would you like more details on this calculation or have any questions?

Here are five related questions you might find interesting:
1. How does the compounding frequency affect the present value?
2. What if the interest rate was compounded monthly instead of annually?
3. How would the present value change if the number of years increased to 10?
4. What is the formula for continuous compounding, and how does it compare?
5. How would you find the future value if given the present value?

**Tip:** The higher the interest rate or the longer the investment period, the lower the present value will be for a fixed future amount.

Find the present value of the given future amount, 13,048.54 at 5.4% compounded annually for 7 years.

Learn how to find the present value of 13,048.54 at an interest rate of 5.4% compounded annually for 7 years. This solution uses the compound interest formula to calculate a present value of approximately 9,029.79. Ideal for high school students learning about compound interest and time value of money.

Math Problem Statement

Solution

Ask a new question for Free

By Image

Math Problem Analysis

Mathematical Concepts

Formulas

Theorems

Suitable Grade Level

Related Recommendation