# Find the present value of$5436.22 due in four years and three months at 4% compounded annually. a:$4601.56 b:$4592.55 c:$4646.90 d:$6422.27 sodni3 2020-12-28 Answered Find the present value of$5436.22 due in four years and three months at 4% compounded annually.
a:$4601.56 b:$4592.55
c:$4646.90 d:$6422.27
You can still ask an expert for help

• Questions are typically answered in as fast as 30 minutes

Solve your problem for the price of one coffee

• Math expert for every subject
• Pay only if we can solve it

casincal

Given:
Principle amount $\left(p\right):=5436.22$
Interest rate$\left(r\right)=4\mathrm{%}=$$\frac{4}{100}$$=0.04$
interest time $\left(t\right)=4$ years 3 months
number of times interest compounded per year(n)=1(given annually compounded)
present value $\left(A\right)=?$
Steps:
Formula for compound interest
$A=P\left(1+\frac{r}{n}{\right)}^{nt}$
$⇒A=5436.22\left(1+\left(\frac{0.04}{1}{\right)}^{1\cdot 4.25}\right)$
$=5436.22\left(1+0.04{\right)}^{4.25}$
$=5436.22\left(1.04{\right)}^{4.25}$
$A=5436.22\left(1.181386\right)$
$A=6422.27$
present value $\left(A\right)=6422.27$
option d is the right answer