Answer:
The amount to be invested now or the present value is $119,484.51
Step-by-step explanation:
FV=PV(1+r/n)^nt
Make PV the subject of the formula
PV=FV/(1+r/n)^nt
Where,
PV=present value=?
FV=future value=$140,000
r=interest rate=8%
n=number of periods=4
t=time=2 years
PV=FV / (1+r/n)^nt
=140,000 / (1+0.08/4)^4*2
=140,000 / (1+0.02)^8
=140,000 / (1.02)^8
=140,000 / 1.1717
=119,484.5096
Approximately 119,484.51
PV=$119,484.51
The amount to be invested now or the present value is $119,484.51
