Answer:
PV= $37,827.85
Explanation:
Giving the following information:
Cf= $2,000 quarterly
Number of periods= 4*6= 24
i= 0.08/4= 0.02
To calculate the present worth, first, we need to determine the future value using the following formula:
FV= {A*[(1+i)^n-1]}/i
A= annual deposit
FV= {2,000*[(1.02^24) - 1]} / 0.02
FV= $60,843.72
Now, the present value:
PV= FV/(1+i)^n
PV= 60,843.72/(1.02^24)
PV= $37,827.85
