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The monthly interest is7%/12 =0.583333% (0.0058333)
The discount factor for36 months is1 / ((1.0058333)^36
So the answer is B
(Are you sure that the question is for present value? Because the way it is worded otherwise makes it sound like the terminal value, which would mean multiplying by (1.0058333)^36 and would then give the answer D)
B.
P.V = F.V / (1+i)^n
= (1+(0.07/12)^(3*12)
=16221.6
Monthly Compounding:7 % Divided By12 = 0.0058
So, according to Formula -
=20,000 (1.0058)^12*3
=24,658.51 is the Correct Ans
use the equation A=P(1+i)^n to calculate simple compound interest. p=20000i=0.07/12 months in a year n=3x12 months in a year A=20000(1+(.07/12))^36 A=$24,658 The answer is d.)
