what is the present value and the interest earned? help would be highly appericated. im fine with all of my course work but its the interest

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1. a loan of $11 200 due in 5 years, with interest of 4.4%/a compounded quarterly.

2. an investment that will be worth $128 500 in 8 years. The interest rate is 6.5%/a, compounded semi-annually.

frosttyfrog Feb 17, 2021

edited by frosttyfrog Feb 17, 2021

ElectricPavlov · Answer 1 · 2021-02-17T08:29:39

FV = PV (1+ i)ⁿ n is the number of periods 5 yr x 4 = 20 periods

i = decimal inteest PER PERIOD = .044/4

PV = present value = loan amount = 11200

FV = futere value

FV = 11200 ( 1 + .044/4)²⁰= $ 13939.31 interest earned = 13939.31 - 11200 =..........

2.) Same equation with different numbers:

128500 = PV (1 +.065/2 )¹⁶Solve for PV