What sum of money now is equivalent of $8,250 two years later, if the interest is 4% per 6-month period (8% compounded semi-annually)?

$7052.13

Explanation:

We can calculate the present value of money equivalent of $8,250 two years later by applying present value formula

DATA

Future value = $8,250

Interest rate = 4%

Number of periods = n = 2 years x 2 times a year = 4 times

Present value =?

Solution

PV =

PV = ×\

PV = $7052.13

True

Explanation: