MATH SOLVE

2 months ago

Q:
# Find the present value of the given future amount. Assume 360 days in a year.$123,640 for 238 days at 8.5% simple interest.

Accepted Solution

A:

Answer:The present value is $117,061.7784 ≅ $117,061.78Step-by-step explanation:* Lets explain the simple interest rule- The rule for the future value of a simple interest is: A = P(1 + rt) , Where# A = future amount# P = Present amount# r = Rate of Interest per year in decimal r = R/100# t = Time period involved in days , months or years* lets solve the problem∵ The future amount is $123,640∴ A = 123,640∵ The number of days is 238 and the year has 360 days∴ t = 238/360∵ The simple rate is 8.5%∴ r = 8.5/100 = 0.085∵ A = P(1 + rt) ∴ 123,640 = P[1 + 0.085(238/360)]∴ 123,640 = P[1 + 2023/36000]∴ 123,640 = P[1.056194444]- Divide both sides by 1.056194444∴ P = 117,061.7784* The present value is $117,061.7784 ≅ $117,061.78