An investment will pay you $91,000 in five years. assume the appropriate discount rate is 6.25 percent compounded daily. what is the present value?

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03-10-2017
Business

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An investment will pay you $91,000 in five years. assume the appropriate discount rate is 6.25 percent compounded daily. what is the present value?

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Аноним Аноним · Answer 1 · 2017-10-11T23:31:09+02:00

Аноним Аноним

11-10-2017

Given:
Value = $91,000, value after 5 years
t = 5 years
n = 365, daily compounding
r = 6.25% = 0.0625, discount rate

Note that
n*t = 365*5 = 1825

Let P = principal, the current value
Then
P(1 + 0.0625/365)¹⁸²⁵ = 91000
1.3668P = 91000
P = $66,578.80

Answer: $66,758.80

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