Consider a future value of $$3,000,7$ years in the future. Assume that the nominal interest rate is $9\mathrm{.}00\%.$

If you are calculating the present value of this cash flow under semiannual $($twice per year$)$ compounding, you would enter $14$grad for $N$ and for $\frac{\text{I}}{Y}$ into your financial calculator.

Entering in the values you just calculated for $N$ and $\frac{\text{I}}{Y},$ along with a $PMT=0$ and a $FV=$$$3,000,$ into a financial calculator yields a present value of approximately $ with semiannual compounding.

If you are calculating the present value of this cash flow under quarterly $($four times per year$)$ compounding, you would enter for $N$ and for $\frac{\text{I}}{Y}$ into your financial calculator.

Entering in the values you just calculated for $N$ and $\frac{\text{I}}{Y},$ along with a $PMT=0$ and a $FV=$$$3,000,$ into a financial calculator yields a present value of approximately $ with quarterly compounding.

Suppose now that the cash flow of $$3,000$ only $1$ year in the future.

If you are calculating the present value of this cash flow under quarterly $(12$ times per year$)$ compounding, you would enter for $N$ and for $\frac{\text{I}}{Y}$ into your financial calculator.

Entering in the values you just calculated for $N$ and $\frac{\text{I}}{Y},$ along with a $PMT=0$ and a $FV=$$$3,000,$ into a financial calculator yields a present value of approximately $ with monthly compounding.

TOTAL SCORE: $\frac{2}{11}$

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