Calculating the Present Value of an investment EXAMPLE EXERCISES Determine the Present Value of the investment for each situation 1. A rate of 6% compounded monthly is guaranteed for 5 years. How much must be invested to yield $35007 2. Over 10 years, a rate of 7.25% compounded quarterly is guaranteed. How much must be invest to yield $15000? 3. An investment offers semiannual compounding with an 8% annual return for 12 years. How much must be invested to yield $12750 4. An investor is looking for a short term investment to yield SS000 over 3 years at an annual rate of 3% with daily compounding in a money market account. How much needs to be invested? 5. Darla's uncle is a dentist and wants to invest a lump sum to go toward her college expenses in 12 years. He has an agreement with the bank to invest ina CD at 7.75% APR for that time with monthly compounding. How much does he need to invest to ensure $20000 is available for her to use for college