calculate Present Value of $500,000 at 6% annually,compounded annually Calculate the PV (Present Value) using the formula: PV = FV / (1 +R)N

Question

i need to find the Present value, using the formula PV=FV/(1+R)n

Comments

You haven't specified n, the number of years. Is it present value after 5 years, 10 years, 25 years? When was the amount invested or borrowed?

Answer 1

The question doesn't specify the number of years so I'll calculate the amount after 5, 10, 15, 20 and 25 years.

We can do this by working out the growth = (1+R)^N=1.06^N

5: 1.3382; 10: 1.7908; 15: 2.3966; 20: 3.2071; 25: 4.2919.

Multiply each of these by $500,000:

5: $669,112.79; 10:  $895,423.85; 15: $1,198,279.10; 20: $1,603,567.74; 25: $2,145,935.36.

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