You have an investment that will mature in 33 months and have a value of $4300

Finance Nov 03, 2020

You have an investment that will mature in 33 months and have a value of $4300. You need some quick cash and decide to sell today at a discount rate of 8.2% compounded quarterly. What is the cash value?

Expert Solution

no of periods = 33 months / 3 = 11 quarterly periods

Present value = Future value / (1 + interest rate / compounding frequency)^{no of periods}

Present value = $4300 / (1 + 8.2% / 4)¹¹

Present value = $3439.7379 or $3439.74

Cash value = $3439.74

Archived Solution

Unlocked Solution

You have full access to this solution. To save a copy with all formatting and attachments, use the button below.

Already a member? Sign In

Important Note: This solution is from our archive and has been purchased by others. Submitting it as-is may trigger plagiarism detection. Use it for reference only.

For ready-to-submit work, please order a fresh solution below.

Or get 100% fresh solution

Get Custom Quote