Calculus with Applications (10th Edition)

by Lial, Margaret L.; Greenwell, Raymond N.; Ritchey, Nathan P.

Published by Pearson

ISBN 10: 0321749006

ISBN 13: 978-0-32174-900-0

Chapter 2 - Nonlinear Functions - 2.6 Applications: Growth and Decay; Mathematics of Finance - 2.6 Exercises - Page 108: 18

Answer

The present value of 20,000 in 4 years at 6.5% per year is $15431.86.

Work Step by Step

Using the formula, we get $P=\frac{20,000}{(1+\frac{0.065}{12})^{48}}\approx 15431.86$ The present value of 20,000 in 4 years at 6.5% per year is $15431.86.

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