Answer:
The present value of $4,300=$3,624.13
Explanation:
The present value is always used to estimate the value of an asset be it financial or financial equivalents to determine their current value accounting for annual interest rates. Continuous compounding is the mathematical limit that can be reached if it's calculated and reinvested into an account's balance over a theoretically infinite number of periods. The formula is expressed as;
F.V=P.V×e^(i×t)
where;
F.V=future value
P.V=present value
e=mathematical constant approximated as 2.7183
i=stated interest rate
t=time in years
In our case;
F.V=$4,300
P.V=unknown
e=2.7183
i=5.7%=5.7/100=0.057
t=3 years
replacing;
4,300=P.V×e^(0.057×3)
4,300=P.V×e^(0.171)
1.1865 P.V=4,300
P.V=4,300/1.1865
P.V=3,624.13
The present value of $4,300=$3,624.13
