Answer:
[tex]\large \boxed{\$4100.07}[/tex]
Step-by-step explanation:
The formula for the future value (FV) of an investment earning compound interest is
[tex]FV = PV \left (1 + \frac{r}{n} \right )^{nt}[/tex]
where
PV = the present value (PV) of the money invested
r = the annual interest rate expressed as a decimal fraction
t = the time in years
n = the number of compounding periods per year
Data:
FV = $7100
r = 8 % = 0.08
t = 7 yr
n = 2
Calculation:
[tex]\begin{array}{rcl}\\7100& =& PV \left (1 + \dfrac{0.08}{2} \right )^{2 \times 7}\\\\& =& PV (1 + 0.04)^{14}\\\\& =&PV (1.04)^{14}\\& =& PV(1.731676)\\PV& =& \dfrac{7100}{1.731676}\\\\& =& \mathbf{4100.07}\\\end{array}\\\text{The present value of the money is $\large \boxed{\mathbf{\$4100.07}}$}[/tex]
