present value of $8K due in 5 yrs at 10%, comp. monthly

[golazin]

$8000 due in five years at 10% compounded monthly. What is the present value at this interest rate?

 

[stapel]

$8000 due in five years at 10% compounded monthly. What is the present value at this interest rate?

Plug the given values into the compound-interest formula they gave you, and solve for the required value.

Eliz.

 

[annuity_man]

Wow I think I can do this one

$8000 due in five years at 10% compounded monthly. What is the present value at this interest rate?

PV= FV/ (1+r)^t

PV= 5000/ (1+ .1/12)^5
PV= 5000/ (1.008333333)^5
PV= 5000/1.042366922
PV= 4796.775391

PV of $8000 due in 5 years, at 10% compounded monthly =~ $4796.78

Can anyone please confirm if this is right?
Thanks.

 

[Denis]

PV= 5000/ (1+ .1/12)^5

Not quite; 5000 should be 8000 (looks like a typo), and the 5 should be 60 :
8000 / (1 + .1/12)^60 = 4862.308733...

 

[annuity_man]

Lol, oops.

 

[golazin]

Hey thnx a lot... that was the right solution