17941FA17C>Quizzes> ChapterXVIll Quiz Chapter XVIlI Quiz Started: Oct 31 at 11:1

Question

17941FA17C>Quizzes> ChapterXVIll Quiz Chapter XVIlI Quiz Started: Oct 31 at 11:15am Quiz Instructions Multiple Choice Questions. Select the correct answers only to the following questions after reading and studying chapter XVld your tetbook. There is no time limit. Question 4 2 pts 4. A simple interest note has a maturity value of $800 and is due to mature in six months. rates are currently 9% compounded monthly, the present value of the note is a. $764.00 b. $763.32 c. $765.55 d$764.93 interest O a Next . Submit Quiz t checked at 9.50pm o save. Las No new data t

Explanation / Answer

We know that

Present value = Future Value / (1+ r /k)n,

where , Future Value = $800 , r = rate = 9 % ,

k = Compounded times in a year = 12 (since it is given in the question that it compounded monthly)

n = number of years = 0.5 ( since matured in 6 months)

Present value = $800 / (1+ 0.09 /12)0.5 = $764.93 (option d)

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