Use the compound interest formula to find the present value​ P, for the following given values.

Question

Use the compound interest formula to find the present value​ P, for the following given values.

A=$20,200

i=0.038

n=93

P=$ _______ ​(Round to the nearest​ cent.)

Answer 1

the underlying formula that you want to use to solve this one is

P = A / (1 + r)^n

for this scenario that means taking

P = 20,200 / (1 + 0.038)^93

P = 629.50

so the current value is $629.50

Answer 2

A₀ = A/(1 + i)ⁿ = 20200/(1 + 0.038)⁹³ = $629.50