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    mxfreds's Avatar
    mxfreds Posts: 1, Reputation: 1
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    #1

    Sep 18, 2007, 09:34 PM
    Present Value
    If the prevailing interest rate is 6%/yr and compounding is monthly, what is the present value of $10,000 received 10 years from now?

    Can someone help me? I'd appreciate it!
    jcau99's Avatar
    jcau99 Posts: 1, Reputation: 1
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    #2

    Oct 3, 2007, 06:08 AM
    Wouldn't you just convert the 6% to a monthly interest rate, which would be 6%/12. That is .5%/month. So:

    I = .5%
    N = 120 (10 years times 12 months in a year)
    FV = $10,000

    PV = $5,496.33
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