Problem 56100. Compound Interest: Present Value

Created by Mehmet OZC

Solve Later

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<div style = "text-align: start; line-height: 20.44px; min-height: 0px; white-space: normal; color: rgb(0, 0, 0); font-family: Menlo, Monaco, Consolas, monospace; font-style: normal; font-size: 14px; font-weight: 400; text-decoration: none solid rgb(0, 0, 0); white-space: normal; "><div style="block-size: 213.741px; display: block; min-width: 0px; padding-block-start: 0px; padding-top: 0px; perspective-origin: 406.997px 106.87px; transform-origin: 406.997px 106.87px; vertical-align: baseline; "><div style="block-size: 21.0018px; font-family: Helvetica, Arial, sans-serif; line-height: 21px; margin-block-end: 9px; margin-block-start: 2px; margin-bottom: 9px; margin-inline-end: 10px; margin-inline-start: 4px; margin-left: 4px; margin-right: 10px; margin-top: 2px; perspective-origin: 383.996px 10.5009px; text-align: left; transform-origin: 383.996px 10.5009px; white-space: pre-wrap; margin-left: 4px; margin-top: 2px; margin-bottom: 9px; margin-right: 10px; "><span style="block-size: auto; display: inline; margin-block-end: 0px; margin-block-start: 0px; margin-bottom: 0px; margin-inline-end: 0px; margin-inline-start: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; perspective-origin: 0px 0px; transform-origin: 0px 0px; "><span style="">Theorem : Compound Interest</span></span></div><div style="block-size: 21.0018px; font-family: Helvetica, Arial, sans-serif; line-height: 21px; margin-block-end: 9px; margin-block-start: 2px; margin-bottom: 9px; margin-inline-end: 10px; margin-inline-start: 4px; margin-left: 4px; margin-right: 10px; margin-top: 2px; perspective-origin: 383.996px 10.5009px; text-align: left; transform-origin: 383.996px 10.5009px; white-space: pre-wrap; margin-left: 4px; margin-top: 2px; margin-bottom: 9px; margin-right: 10px; "><span style="vertical-align:-5px"><img src="data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAALIAAAAnCAYAAACrIRKYAAAAAXNSR0IArs4c6QAAB7RJREFUeF7tm2XINFUYhq9PRRFRseuHjYJiIIqBBSYWit2Jit3d3dgK+sNObEzEDsQOMDGwu7u4Ps75ON8wu7OzO7P77rtz4OVld+fUc+7zxP08M4GmNRIYBxKYMA720GyhkQANkBsQjAsJNEAeF8fYbKIBcoOBcSGBBsjj4hibTTRArh8DMwNLA48A/9Y/3ZidYQpgdeAl4NuqV9kAuWqJTj7ewsA+wCnAF/VONRSjzwMcBJwPfFjliouAvBCwCbA+sHLJifcALi/ZZ1CPzwlsX7DPn4CXgceA64E3gf/aLHgR4EDg2A5BPAuwMzB1AP6gZFH3vHMAh1UN5iIgx02tBDwZPnigWwD3Zw7SA1gUOBzYClgVeLxuqVQ8/mwBpGuEcQXhmcBfwILA0QHwysDvzwF+y1mD46h1vMgCv10TwDsGzT1vAP5JFe9rrA0nnrYMWPmlisV1CuRVkgMRwNsBX7dYwHLhED2ct6pYZB/HmBu4DlgN+AzYAHghmX8m4Epg4/DdtuH5dIlTBk08DXA68HeL9fv7DoAaairgAGD6EQGyMjoU+BW4IMey+fsKgLjz/0fAUcC6wBHBam2Tnk2nQN4duCwcyGnAMcA/LQ5Ik6rm2hf4ro8grGKqZYC7gbmCxcm7sALu3DDZFcB+4UDi/IsBFwJ7FlxkD8umHFNLoBWoQyO7t1OB54Lr8nsVAuthjPmBS4PP/EaLcXT3rgoWy6D5XWB2QLnvGpTKxK6dAHla4DxAMNs2Au5qswH9zRWBe4A/e9joILp6y68tuLDpMw8Afv4m9BGcxwUN2+6yZ/eme6ElWLtGjRzdQ90dL2OeS9RPmSsrL6wW64QcxSg21cKbAw8BTwB3AvsHJSHIn40L7gTI+m0GN4LzleAfD5vL0MkB6ePrCnjINn24m3I6pkC+BtgL0Ge2RVkdH4Tfybw+M4pAdt9rBjAbU72fEdaMQfNuCpwcrImPqFS1mLsBX5YBspM9GDpkD86v1dgnhkmHGeCpf/wOoABfzQg3aolo+tW6UmuRvdgwaFQvgWaw0zaqQJYVuzHgJ2vllwBuBT4HdgLeSxTFo8HyTYo/ijRy0cF5UGuF4EeqadDmqlPg5D2n6b0vBFwKUB/sh8yD8qBeZol9eVDB/nziVghwueO8vu3WNoxAVoEtHva7FLA8oKulHz5rcAEE4A3hcuexE1Hr6iPrXqR0ZrR8e4f4zFgikg5SwrenAi0Ccqre7bce8AxglsaN6NMdApyVOt5dokntpmbvpfXi+qRBXFbTuiYZhTOCf6YrYaJDfzoGvf5+cWBzpCDLxAfDCGRdMfEhqCIRoFJ7O8hBrNjanUl05wR+6qLF79cJLp6WUax6RvrG0r/2eTEqzyIgR/WulmnVWpnhsoAcJJAjCGUpbP5XO9tmCJpAQS8bmAi1xy0Zai0yD3LnZVmHYQRyPF81sa7nawGMWmaZBv3YS4IFk2prxRd77mrarYGvwqCCVMtnEC37ZUo7KlU5fZklKUu1/UT3ogjIIl8fxpaNdl2oZsToM71NZQE8Fp6XMjSwWzIITa0ijSbAY0ZPH+3eYD5/zFl0HENKqWxGc5iBHF0A5aeMPgjxUrusZyo+eWFx5l+MsSINqgW8KFg9PQCTUAL+SODq1JVtB+RIjziRLS/l7G36OUSSYwGQ3a7BIE1qx5YX0HYybgSybpZUWplWBZDTy1hm7uyzZXjslOmxKMoA92Ag76K3WpMXQfc0BXLp9bcDclTv+il5Wa7ImQqANPtVehED7pC9sJpGKZ6ybRSBnM2EytaULUuoHchFWS4vgfTJx0POVqQXVjfCNOhTZVEMjKJrkTI9ppr1hf8oKTutukm2spTlZNO008hl0tIl1577+KCCvfTCyk+qIT7tYkOjGOxFpkcFYP3Jw13IzXP3QqQZ0tLDtAJyNi2dVxxTerKCDoMCcnphdSnKUmdxW6NGv6VMj5zuLl3U1kSc6d5la1ZK4asVkNO0dFX0WqmF9enhKi9sTB7JfIxCQiQNLrutPbea0OBaV85itK5bKyCnaelWWa6uJx1DHau+sMpN1qJsBF4Fa1Ek1qqLhiLT04uiM08hvWtyqRu3ZNKe84Bsnaz1A76SYssrVSwS2jD87t71y9QINgl9K61886PbJrcuvymXfFuJQXynTx7WxFO3QVPRdFUCOWV6elF0yt+6dbN1MmNdtxTILk6qzWLvzZIRdeQtyTQQuhn4vuvZxk5Hzb/CU4jWucZmqeAdITMVSzPLrDqmUdX0RRF8LB43lWv1l31syltQy8tqcqt6t61KIKdMT7d05XQh2eHrY3nF9WXkXpjZKzVY8/BECcwXMnvW0saCorEgmrFWWO+bRKb6jSc+6VVARSnqXscfxf7KVA2ru+CbMmV51VGQmUG2b9n4PmMsgehp3w2QexJfy84elHUCT1d1UPUscyCj1nLRGyDXd5b63r72bjD5en3TDN3IujiWfvo2TnyzpudNNEDuWYRtBxDMsj8yGMNcj1KVlASxtN3ZVYLYxTVAruqIWo8jnSktJ/vQaWlj/avq/wyyNAuEV/srjxsaIPf/QJsZa5BAA+QahNoM2X8JNEDuv8ybGWuQQAPkGoTaDNl/CTRA7r/MmxlrkMD/44DtN4S6nS0AAAAASUVORK5CYII=" width="89" height="19.5" style="width: 89px; height: 19.5px;"></span></div><div style="block-size: 21.0018px; font-family: Helvetica, Arial, sans-serif; line-height: 21px; margin-block-end: 9px; margin-block-start: 2px; margin-bottom: 9px; margin-inline-end: 10px; margin-inline-start: 4px; margin-left: 4px; margin-right: 10px; margin-top: 2px; perspective-origin: 383.996px 10.5009px; text-align: left; transform-origin: 383.996px 10.5009px; white-space: pre-wrap; margin-left: 4px; margin-top: 2px; margin-bottom: 9px; margin-right: 10px; "><span style="block-size: auto; display: inline; margin-block-end: 0px; margin-block-start: 0px; margin-bottom: 0px; margin-inline-end: 0px; margin-inline-start: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; perspective-origin: 0px 0px; transform-origin: 0px 0px; "><span style="">where,</span></span></div><ul style="block-size: 81.7555px; font-family: Helvetica, Arial, sans-serif; list-style-type: square; margin-block-end: 20px; margin-block-start: 10px; margin-bottom: 20px; margin-top: 10px; perspective-origin: 390.993px 40.8778px; transform-origin: 390.998px 40.8778px; margin-top: 10px; margin-bottom: 20px; "><li style="block-size: 20.4389px; display: list-item; margin-block-end: 0px; margin-block-start: 0px; margin-bottom: 0px; margin-inline-start: 56px; margin-left: 56px; margin-top: 0px; perspective-origin: 362.994px 10.2137px; text-align: left; transform-origin: 363px 10.2194px; white-space: pre-wrap; margin-left: 56px; "><span style="block-size: auto; display: inline; margin-inline-start: 0px; margin-left: 0px; perspective-origin: 0px 0px; transform-origin: 0px 0px; "><span style="">F : Future value at the end of n periods</span></span></li><li style="block-size: 20.4389px; display: list-item; margin-block-end: 0px; margin-block-start: 0px; margin-bottom: 0px; margin-inline-start: 56px; margin-left: 56px; margin-top: 0px; perspective-origin: 362.994px 10.2137px; text-align: left; transform-origin: 363px 10.2194px; white-space: pre-wrap; margin-left: 56px; "><span style="block-size: auto; display: inline; margin-inline-start: 0px; margin-left: 0px; perspective-origin: 0px 0px; transform-origin: 0px 0px; "><span style="">P : Present value</span></span></li><li style="block-size: 20.4389px; display: list-item; margin-block-end: 0px; margin-block-start: 0px; margin-bottom: 0px; margin-inline-start: 56px; margin-left: 56px; margin-top: 0px; perspective-origin: 362.994px 10.2137px; text-align: left; transform-origin: 363px 10.2194px; white-space: pre-wrap; margin-left: 56px; "><span style="block-size: auto; display: inline; margin-inline-start: 0px; margin-left: 0px; perspective-origin: 0px 0px; transform-origin: 0px 0px; "><span style="">r : Annual nominal rate</span></span></li><li style="block-size: 20.4389px; display: list-item; margin-block-end: 0px; margin-block-start: 0px; margin-bottom: 0px; margin-inline-start: 56px; margin-left: 56px; margin-top: 0px; perspective-origin: 362.994px 10.2137px; text-align: left; transform-origin: 363px 10.2194px; white-space: pre-wrap; margin-left: 56px; "><span style="block-size: auto; display: inline; margin-inline-start: 0px; margin-left: 0px; perspective-origin: 0px 0px; transform-origin: 0px 0px; "><span style="">n : Total number of compounding periods</span></span></li></ul><div style="block-size: 21.0018px; font-family: Helvetica, Arial, sans-serif; line-height: 21px; margin-block-end: 9px; margin-block-start: 2px; margin-bottom: 9px; margin-inline-end: 10px; margin-inline-start: 4px; margin-left: 4px; margin-right: 10px; margin-top: 2px; perspective-origin: 383.996px 10.5009px; text-align: left; transform-origin: 383.996px 10.5009px; white-space: pre-wrap; margin-left: 4px; margin-top: 2px; margin-bottom: 9px; margin-right: 10px; "><span style="block-size: auto; display: inline; margin-block-end: 0px; margin-block-start: 0px; margin-bottom: 0px; margin-inline-end: 0px; margin-inline-start: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; perspective-origin: 0px 0px; transform-origin: 0px 0px; "><span style="">Calculate P, given F, r and n. Round to the nearest cent.</span></span></div></div></div>

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Problem 56100. Compound Interest: Present Value

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