Find the present value that will grow to $27,000 if interest is 2% compounded quarterly for 14 quarters

Answer 1

Let PV = Present Value

Quarterly Interest Rate = .02/4 = .005

FV = Future Value

then

FV = PV(1 + .005)^14. Or. 27,000 = PV(1.005)^14

Solving for PV, we find that PV = $25,179.02