Present value is the amount of money that must be invested now at a given rate of interest to produce a given future value. For a 1-year investment, the present value can be calculated using Present value =  Future value 1 + r, where r is the yearly interest rate expressed as a decimal. (Thus, if the yearly interest rate is 8%, then  1 + r = 1.08.)  If an investment yielding a yearly interest rate of 13% is available, what is the present value of an investment that will be worth $4000 at the end of 1 year? That is, how much must be invested today at 13% in order for the investment to have a value of $4000 at the end of a year? (Round your answer to two decimal places.)

Question

Present value is the amount of money that must be invested now at a given rate of interest to produce a given future value. For a 1-year investment, the present value can be calculated using

Present value = 
Future value
1 + r
,

where r is the yearly interest rate expressed as a decimal. (Thus, if the yearly interest rate is 8%, then 

1 + r = 1.08.)

 If an investment yielding a yearly interest rate of 13% is available, what is the present value of an investment that will be worth $4000 at the end of 1 year? That is, how much must be invested today at 13% in order for the investment to have a value of $4000 at the end of a year? (Round your answer to two decimal places.)

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