Present Value

of a Lump Sum

:

If you need $

$4$

$,$

$2$

$00$ at the end of

$5$

year

s

and you can invest at

the

$9\mathrm{.}6$

$\%$ nominal

annual

interest rate, what would you need to invest today under the

various compounding periods?

Use the

rate per period

in your calculations

$,$ except for the

co

ntinuous compounding present value.

Show the

difference

s

as compounding periods

increase