Respuesta :
Answer:
$104,947.03
Explanation:
We know that
Future value = Present value × (1 + rate)^number of years
$197,000 = Present value × (1 + 0.065)^10
$197,000 = Present value × (1.065)^10
$197,000 = Present value × 1.8771374653
So, present value would be
= $104,947.03
In case of semi-annual, the interest rate is divided by two and the time period is doubles and we did the same in the above calculation.
The present value is the value of future money in the context of the current date. It is the worth of future money taking into consideration the time value of money.
The deopsit value of $197,000 today is $104,947.03.
Computation:
Given,
Future value =$197,000
Rate of interest = 13%
compounding period= semi-annually= 2
number of years= 5
The formula of Future value will be sued to determine the present value of the deposit.
[tex]\begin{aligned}\text{Future Value}&=\text{Present Value}\times\left(1+\frac{\text{rate of return}}{\text{compounding period}} \right )^{\text{no. of years}\times\text{compounding period}}\\\$197,000&=\text{PV}\times\left(1+\frac{0.13}{2} \right )^{5\times2}\\\$197,000&=\text{PV}\times1.877\\\frac{\$197,000}{1.877}&=\text{PV}\\\$104,947.03&=\text{PV} \end{aligned}[/tex]
To know more about the present value, refer to the link:
https://brainly.com/question/17322936
