Edward W.
asked • 10/08/19Simple Interest and Compound Interest
F = 10,709.41 r = 2% m = 12 t = 3 years P =
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1 Expert Answer
Hello, thank you for taking the time to post your question!
Typically for a complicated time value of money question like this you want to use something like a financial calculator or spreadsheet software to solve for the =PV( ) value. When I do that for this set of information using
FV: $10,709.41
APR: 2%
Time: 3 years
Compounds per Year: 12 (monthly)
I end up with a PV value of $10,086.25 for the beginning value.
I hope that helps get you moving in the right direction! Feel free to reach out if you have any additional questions beyond that :)
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RUBEN B.
Present value with no additional payments is 10086.25 These problems you must remember to adjust the annual interest into periodic interest so 2%/12 and multiply the years by the periods per year, so 3x12 = 36. You then proceed as normal to discount the future value to present day dollars.05/30/20