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Steve Smith will receive $82,870 on 5 years from now, from a trust fund established by his father. Assuming the appropriate interest rate for discounting is 10% (compounded semiannually), what is the present value of this amount today? (Round factor values to 5 decimal places, e.g. 1.25124. Round answers to the nearest whole dollar, e.g. 5,275.)

Respuesta :

Answer:

$50,875

Explanation:

The computation of the present value is shown below:

Given that

NPER = 5 × 2 = 10

RATE = 10% ÷ 2 = 5%

PMt = $0

FV = $82,870

The formula is shown below:

= -PV(RATE;NPER;PMT;FV;TYPE)

After applying the above formula, the present value is $50,875

Hence, the present value is $50,875

We simply applied the above formula so that the correct value could come

And, the same is to be considered

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